Purpose The purpose of this study is to examine the International Accounting Standards Board (IASB)’s response to criticism and political pressure at the time of the global financial crisis through the lens of legitimacy theory. Design/methodology/approach This study constructs a thick description about a causal mechanism between social crisis and organizational change using a process-tracing approach that combines a historical narrative and a theoretical consideration. Findings The IASB faced criticism of its accounting standards for financial instruments and its governance structure during the financial crisis. This criticism represented the crises of pragmatic and cultural legitimacy. Facing these legitimacy crises, the IASB adopted such legitimation strategies as normalization and restructuring to repair its legitimacy. Additionally, in these repairing processes, the IASB, as a bonus, became institutionally embedded itself in the global political arena and succeeded to strengthen its legitimacy. Originality/value The study suggests that the financial crisis had a significant impact on the standardization of transnational accounting. Indeed, the crisis was an important turning point of the IASB’s work on revising its accounting standards to reduce complexity and altering its Constitution. Moreover, the authors bridge the gaps in the literature on accounting and legitimacy by examining how the IASB used particular legitimacy repair strategies when facing its legitimacy crises

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The purpose of this study is to construct a historical narrative of the development of the standard-setting in Japan, where the main standard-setting bodies were changed from public to private sector entities. This study specifically examines the unique coexistence of four sets of accounting standards through the lens of legality. My findings show that four sets of accounting standards are formalized into the domestic legal system through the endorsement by the Financial Services Agency of Japan, although differences in the standard-setting processes and patterns of public delegation exist. This finding also suggests an interesting example of hybridization between legally incomplete ex ante delegation to private sector standard-setting bodies and ex post endorsement by the public sector.

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