Rhetoric in International Standard Setting Process: Strategies Employed by the IASB/FASB and the Constituents

• In Event: Concurrent Session 2.4: International Financial Reporting

Abstract

The paper seeks to explore in depth the ways in which rhetorical strategies are employed in the international accounting standard setting process. The study proposes that rather than simply detailing new accounting requirements, the texts and drafts of accounting standards are artefacts, i.e. deliberately and carefully crafted products, that construct, persuade and encourage certain beliefs and behaviours. Standards are prepared and written by members of a regulatory body and as such they are shaped by a particular point of view regarding the significance of various accounting matters. The present study draws on the notion of dialogic structuring of persuasion promoted by Billig (1987) and inspired by the structuralist views of de Saussure (1916). The paper considers rhetoric as a dialogue rather than a monologue. In other words, any argument or statement invites a counter-proposal from an individual or a group envisaged as the audience. Notably, the persuasive and constructive strategies are also employed by the constituents submitting comment letters on the regulatory proposals. In our study we explore in particular the joint IASB and FASB proposals and subsequent regulations on the scope of consolidation that address issues of off-balance sheet financing, a subject that is very timely and of great topical importance. The analysis revealed sophisticated rhetorical devices used by both the Boards and by the lobbyists. These were categorised into four main headings of: (a) lexical choice, (b) sound pattering, (c) figurative language and (d) schematic devices. These reflected Aristotelian ’s ethos, pathos and logos. The regulatory documents contained rhetorical devices based largely on Aristotle’s logos and ethos while comment letters submitted by the constituents used all of the three rhetorical strategies. The research demonstrates that those using accounting standards as well as those reading comment letters on the proposals for new standards should be aware of the normative nature of these documents and the subjectivity inherent in the nature of the text.

Author

• Renata Isabel Stenka, University of Reading