Constituents’ Formal Participation in the IASB's Due Process : New Insights into the Impact of Country and Due Process Document Characteristics

This paper adopts a multi-issue/multi-period approach to provide new insights into key determinants of constituents' formal participation in the due process of the International Accounting Standards Board (IASB). Based on an analysis of 8,825 comment letters submitted during the period 2006–2012, we find imbalances in the representation of constituents. Multiple regressions reveal that among various economic and cultural variables equity market capitalization and the society's level of individualism are the key drivers of the country-level of constituents' participation, and each variable has explanatory power over the other. The level of constituents' participation is positively associated with the number of input opportunities offered by a due process document but unrelated to the complexity of a standard-setting project. The results are robust across various sub-samples and to additional sensitivity tests. Our findings indicate threats to the input legitimacy of the IASB and suggest avenues to stimulate constituents' participation