Transnational regulation and the infrastructure of financial reporting

Abstract

The regulation of financial reporting is increasingly carried out by transnational regulators. Since 2005, companies listed in the European Union have been required to prepare their consolidated financial statements in accordance with the International Financial Reporting Standards (IFRS). The IFRS represent a hybrid, in that a private sector body sets the standards, but they are legally binding in the European Union and elsewhere. The common set of standards is intended to enhance the quality of financial reporting and increase the comparability of financial statements across borders. When the same standards are used across borders, they must be translated into the official languages of the adopting jurisdictions. The standards are also translated into accounting practice as accountants prepare the financial statements in accordance with them. The present dissertation employs qualitative research methods to study the infrastructure of financial reporting. The dissertation consists of an introductory overview and three essays. Each of the essays focuses on the infrastructure of financial reporting from a slightly different perspective. At the same time, they analyse the standard-setting, interpretation, and implementation chain. More specifically, the present dissertation examines the problematics of translation and the work required to translate the standards originally written in English into other languages. It also studies the interpretation of the standards by accountants who are not native English speakers, and the translation of the financial statements. Prior literature has documented how accounting concepts and concept systems in different languages do not overlap neatly. Therefore, the present dissertation sets out to examine the construction of equivalence between concepts that may originate in differing accounting traditions. Overall, the dissertation follows accounting standards into organizational contexts with a focus on their interpretation and implementation. It sheds light on the work required to translate the standards into practice, and the work involved in causing a new accounting practice – in conjunction with a new business model – to emerge and spread. The dissertation shows that such work is intertwined with and requires various elements of the infrastructure of financial reporting, not least the different networks of expertise beyond the expertise traditionally associated with financial accounting.