Using arguments and myths to lobby over controversial accounting issues: evidence from Japan

Noriyuki Tsunogaya, Andreas Hellmann

Research output: Contribution to journalArticlepeer-review

Abstract

Purpose: This study aims to examine the (overt) arguments and (covert) myths the Business Accounting Council (BAC) members have used to lobby over controversial accounting issues, such as the application of fair value accounting (FVA) and the adoption of International Financial Reporting Standards (IFRS) in Japan.

Design/methodology/approach: The authors used a content analysis to examine 85 statements included in multiperiod BAC meeting minutes and 68 articles prepared by International Accounting Standards Board (IASB) representatives from Japan.

Findings: The results reveal that together with the arguments, myths were created and amplified by opponents of FVA and the Financial Services Agency to hide the latter's strong regulatory power. They created these myths, using covert stories of the importance of manufacturing activities and tax accounting (for small- and medium-sized enterprises [SMEs]), to oppose mandatory IFRS adoption in Japan and, thus, to maintain vested rights in preparing the Japanese generally accepted accounting principles and Japanese accounting standards for SMEs.

Originality/value: First, this study contributes to the lobbying literature by focusing on the coalition (network) effect of influential stakeholder groups. Second, although lobbying activities have been investigated mostly using comment letters, this study reviews multiperiod BAC meeting minutes and articles prepared by IASB representatives from Japan. Third, the study examines both overt arguments and covert myths, both of which are important in unmasking the fundamental structures of power within influential organizations, such as government agencies and standard-setters.

Original languageEnglish
Pages (from-to)355-390
Number of pages36
JournalPacific Accounting Review
Volume32
Issue number3
Early online date4 May 2020
DOIs
Publication statusPublished - 30 Sep 2020

Keywords

  • Business accounting council (BAC)
  • Fair value accounting (FVA)
  • Financial services agency (FSA)
  • IFRS adoption
  • Japanese generally accepted accounting principles (J-GAAP)
  • Myths

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