Users’ participation in the accounting standard-setting process: A theory-building study

The authors develop an explanatory theory using a meso-level approach and qualitative methodology to describe the participation of financial statement users in the standard-setting process (e.g. financial analysts and institutional investors). The theory links the characteristics of the standard-setting process to the individual determinants of users’ participation. The instrumental, symbolic and systemic dimensions of Hardy’s [Hardy, C. (1994). Power and politics in organizations. In C. Hardy, editor. Managing strategic action. London: Sage Publications] power framework are operationalized in the standard-setting context, and they introduce the descriptive categories of this process. The three determinants of behaviour of Vroom’s [Vroom, V. H. (1964). Work and motivation. New York: John Wiley & Sons] expectancy theory (valence, instrumentality and expectancy) provide the determinants of users’ participation. Each type of legitimacy (pragmatic, moral and cognitive) identified by Suchman [Suchman, M. C. (1995). Managing legitimacy: strategic and institutional approaches. Academy of Management Review 20 (3), 571–610] in his typology is then used to link the descriptive categories of the standard-setting process to the determinants of participation suggested by Vroom. By combining the categories provided by Hardy, Vroom and Suchman, we propose a preliminary model of users’ participation that we refine based on information gathered through interviews we conducted with Canadian users of financial statements.