This paper explores the due process of accounting standard-setting by focusing on relative levels of stakeholder and jurisdictional influence. We draw on legitimacy theory to explain our findings and ask what implications any bias might have for the IASB. This study extends the standard-setting literature in three ways. First, we create a weighted coding system to analyse the content of comment letters. Second, we test for differences in the acceptance rate of comments made by stakeholders and by jurisdictions. Third, we analyse IASB discussion documentation that sheds light on the decision-making process. Previous studies have focused on whether outcome-oriented proposals are 'influential' (persuasive) by focusing on success rates measured as proposed changes being accepted. We widen this definition to include whether constituents' views are discussed. We find that accounting firms appear to have significantly less influence than other stakeholders. We also find that the IASB reacts less favourably to UK proposals but comments from the US are more likely to be discussed. A lack of fairness (real or perceived) could jeopardise perceptions of the procedural legitimacy of the due process and ultimately impair the IASB's cognitive legitimacy. Fogarty's (1994) review of the FASB standard-setting process identified a series of constraints, opportunities and dilemmas. The question of whether certain stakeholder groups hold greater levels of (relative) influence has been the subject of much work and researchers have studied this phenomenon in both domestic and international contexts (e.g. McEnroe, 1991, 1998; Kwok and Sharp, 2005; Cortese, Irvine and Kaidonis, 2010). Almost invariably, influence and legitimacy are considered together (Hussein and Ketz, 1991;McEnroe, 1993;Tutticci, Dunstan and Holmes, 1994;Suchman, 1995;Larson, 2002;Chua and Taylor, 2008;Burlaud and Colasse, 2011;Danjou and Walton, 2012). This paper reviews the IASB's standard-setting due process in relation to the complex and This study is motivated, at least in part, by criticisms of, and challenges to, the IASB's procedural legitimacy (e.g. Larson and Herz, 2013;Burlaud and Colasse, 2011; Kwok and Sharp, 2005). This is an important issue within an accounting standard-setting context. Procedural legitimacy is a type of moral legitimacy which can be created (lost), maintained, and built (impaired) according to levels of perceived independence and impartiality (Suchman, 1995). Suchman (1995) distinguishes legitimacy into three primary forms: pragmatic, moral and cognitive.

Our study attempts to determine whether. and if so why. the large auditing firms are able to earn ;I premium on their audit worh in the UK. We start by confirming the apparent existence of a Big Firm premium during the period 19x5-2002. We e x m i n e industry specialimtion. non-audlt service fee and monopoly pricing explanations for the premium. The results of our tests of industry specialisation are mixed. There is little evidence that this premium is associated with industry specialisation when specialists are defined at the national level. Significant preniia are observed if specialisation is defined at the city level. particularly if the auditor is the industry leader. However. when appropriate allowance is made for endogeneity. by modelling both audit and non-audit fees in a siniultmx)us equations framcworh. the Big Firm premium disappears. We find evidence to suggest that non-audit fees earned by auditors from their audit clients are positively related to the size of the audit fee and vice versa. Finally. when the sample is stratified by the s i x of audit client. we find no systematic evidence of anti-competitive pricing.

Purpose -The purpose of this paper is to address "the existing literature gap on the information content of derivatives reporting". Prior work finds failings in compliance with mandatory reporting requirements in respect of financial instruments and derivative financial instruments. Instead of identifying weaknesses in compliance the paper identifies where firms over-comply or in other words, where firms voluntarily disclose more than they are required and whether this is incremental information or serves another purpose. Design/methodology/approach -The paper reviews the financial instruments disclosures of the FTSE 100 non-financial IFRS 7 compliant firms. Based on these results, on a case-by-case basis the authors address potential causes and rationale for this extra disclosure. Findings -Prior research suggests that it is counter intuitive to argue that firms will provide voluntary disclosure in a mandatory reporting environment because information of this sort tends to be proprietary and competition sensitive, not to mention costly to prepare. However, it is found that firms have voluntarily published information in excess of the requirements and the authors suggest that this extra detail is most commonly associated with a legitimation strategy. Originality/value -In spite of the importance of derivatives usage and management in addition to the increased and often complex reporting requirements, the authors are not aware of any previous study of this type.

This paper examines the effects on UK audit market concentration and pricing of mergers between the large audit firms and the demise of Andersen. Based on data over the period [1985][1986][1987][1988][1989][1990][1991][1992][1993][1994][1995][1996][1997][1998][1999][2000][2001][2002], it appears that mergers contributed to a rise in concentration ratios to levels that suggest concern about the potential for monopoly pricing. The high concentration ratios have not improved the level of price competition in the UK audit market. Our pooled models suggest that concentration ratios are associated with higher audit fees. The evidence suggests that the effects of mergers between big firms on brand name fee premium and on price competition vary depending on the particular circumstances. The brand name premium is strongest for the largest quartile of companies prior to the mergers. After the Big Six mergers, the premium increases for average-sized companies but falls for the smallest and largest companies. Following the PricewaterhouseCoopers merger, the premium increases for below median-sized clients but decreases for above median sized clients. For the Deloitte-Andersen transaction, the premium falls for the smallest and largest companies but increases for those in the second quartile. Our results provide evidence that auditees are likely to pay higher fees if their auditor merges with a larger counterpart. We attribute merger-related fee hikes to product differentiation, rather than anticompetitive pricing.3

No abstract