DETERMINANTS IN THE STANDARDS REVIEW PROCESS: AN ANALYSIS OF IFRS FOR SMES

The IFRS for SMEs is a simplified framework of financial reporting standards designed specifically for small and medium-sized enterprises (SMEs). The IASB issued this standard to cater to entities that do not have public accountability but still need to prepare high-quality financial statements for internal and external stakeholders. This study focuses on comprehending and appreciating the crucial influence of stakeholders in developing accounting standards. Their involvement is not merely a factor but an essential element of the standard-setting process. We will conduct a qualitative analysis of comments letters from the First Comprehensive Review of IFRS for SMEs, acknowledging the importance of each contribution. The analysis will also delve into the relationships between the IASB and the stakeholders, aiming to uncover insights into stakeholder influences and IASB independence during the review process. The IASB has been criticized for not considering the perspectives of users and owners in establishing requirements, particularly in the IFRS for SMEs. The analysis reveals a high similarity between Europe and other Global organisations, mainly due to their European origins. However, responses from Oceania show the lowest similarity, mainly due to limited comment letters. Professional organizations, Accounting Regulatory Bodies, and Accounting, audit, and consultant firms share common concerns, while Insurance Agencies show lower similarity due to differing concerns and vocabulary. The IASB should consider the interests of all stakeholders, but the lack of clarity on revision criteria may undermine its legitimacy and transparency. Therefore, it is crucial to provide clear and transparent revision criteria to ensure universally accepted standards and enhance stakeholder confidence in the process.