When Global Accounting Standards Meet the Local Context—Insights from an Emerging Economy

• In Event: International Accounting

Abstract

In this paper we investigate the translation and application of global accounting standards in a local context. Understanding how IFRSs work in relation with local actors/institutions is very important and can explain practice variations. We employ a theoretical framework derived from the institutional theory, developed by complementing the traditional focus on isomorphism (DiMaggio and Powell, 1983) with an emphasis on actors’ behavior and networks and with the strategies used by organizations to respond to institutional pressures (Oliver, 1991). The interrelated nature of the role, power and searches for legitimacy of the main actors influence the institutional context. We find a variety of organizational responses to IFRS, such as genuine compliance resulted from conscious obedience and total support for IFRS or from balancing and bargaining conflicting interests. Also, examples of symbolic adoption and apparent compliance are found and explained by the reduced level of the perceived legitimacy and efficiency resulted from genuine application and the local interests of actors.

Authors

• Catalin N. Albu, The Bucharest University of Economic Studies

• Nadia Albu, The Bucharest University of Economic Studies

• David Alexander, University of Birmingham