The Legitimacy of Global Accounting Standards in the Wake of the Financial Crisis

This study examines and clarifies the legitimacy of the global accounting standard setting mechanism and exposes the politicization of accounting regulation. In particular, we investigate the legitimation crises suffered by the IASB and IFRS in recent times and assess their restoration processes during the financial crisis by using the analytical framework proposed by Tamm Hallström (2004). We find that the IASB decoupled its normal due process in order to retain the endorsement of the EU and avoid a further carve-out. To meet concerns about the IASB's governance from the U.S. and other non-European countries, the IASB established the Monitoring Board as a compromise to ease tension between independence and accountability. We also find that the IASB systematically prioritized the needs of the EU, its biggest customer