The impact of external pressures (gaiatsu) and internal pressures (naiatsu) on Japan’s accounting reforms since the late 1990s

Noriyuki Tsunogaya, Chris Patel

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)


Purpose – The paper extends the literature by examining the politics, conflicts, and compromises resulting from external pressures (gaiatsu, 外圧) and internal pressures (naiatsu, 内圧) on the convergence and globalization of accounting and accountability in Japan.

Design/methodology/approach – Using Japan as a case study, we examine how and why the stimulus for significant accounting reforms arises, how the government manages and reacts to the powerful forces of gaiatsu, and how it balances naiatsu among key stakeholders.

Findings – The ongoing changes in accounting regulations in Japan are neither the result of an unmediated response to gaiatsu nor the outcome of naiatsu. Rather, Japanese accounting changes are the consequence of complex external interactions and internal compromises. Specifically, Japan demonstrates a repetitive pattern of conflict management, which alters the domestic power balance based on naiatsu, and forces the Japanese Government to make compromises to policy changes initiated by gaiatsu.

Research limitations/implications – The findings have implications for the development of accounting and accountability, the globalized business world, and international accounting research because they challenge claims made by global standards setters that international standards such as IFRS are superior, built on so-called “best practices,” and are relevant to all countries.

Originality/value – Invoking the concepts of gaiatsu and naiatsu is a critical approach to understanding Japan’s convergence towards economic liberalism and Anglo-American models of accounting and accountability.
Original languageEnglish
Pages (from-to)857-886
Number of pages30
JournalAccounting, Auditing and Accountability Journal
Issue number4
Early online date6 Mar 2020
Publication statusPublished - 18 May 2020


  • Accounting big bang
  • Gaiatsu (外圧)
  • Global convergence
  • Japanese generally accepted accounting principles (J-GAAP)
  • Naiatsu (内圧)


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