by Tomo Suzuki
In this era of globalisation, various kinds of rules, standards and regulations are proposed at an international level, however many of them fail to be implemented. In the field of financial accounting, however, we are about to witness a “successful” case of global regulation by the International Accounting Standards Board (IASB) which sets the International Financial Reporting Standards (IFRS) as the single set of accounting standards across the world. For some regulators and policy makers in other fields, this phenomenon appears as a model for their future development.
How has this “successful” development happened? Does this case of global accounting standards offer any lessons for thinking about the process of global regulation in general? What are the problems associated with it?
In 1999, Tomo Suzuki developed a blunt hypothesis that IASB would successfully implement the global regulation within a decade. The prediction of the “success” was made:
a) not because of the theoretical or empirical need for the internationally harmonized standards, b) not because of the rightness of the IASB’s position on the superiority of Fair Value Accounting over Historical Cost Accounting, but
c) mainly because of the weakness of the local jurisdictions against the centre (or the “International”) which structurally suffer from a lack of political resources. Here, the structural weakness, or “the structure of losers” can vary depending on each local jurisdiction.
Ten years ago the above hypothesis was, of course, rather a personal prediction than an academically published and theoretically protected formal hypothesis at that time. It was, however, developed with a clear intention to conduct longitudinal research on how the issues around IASB and IFRS evolve over a long period of time. Over the last decade, Tomo Suzuki endeavoured to accumulate the data from several jurisdictions including China, India and Japan, as well as much smaller countries such as Mongolia. See, for example, Unexplored Impacts of IAS/IFRS data platform. More than 300 interviews have been conducted so far, which includes minister/vice-minister-level interviews as well as interviews with the front line accounting clerks, teachers, journalists, etc…
Dr. Suzuki is continuing to develop a report which somewhat makes sense of what has happened over the last 10 years in the field of accounting from a view point of the local actors. Rather than focusing attention on the centre, which tends to be advocated via textbook-type publications, Dr. Suzuki hopes to identify unexplored impacts on wider stakeholders in local settings, which will hopefully provide an as-yet under-focused and yet important foundation in thinking of the process of global regulation.