The Role of Local Accounting Standard Setters in Institutional Complexity: 'Explosion' of Local Standards in Japan


The paper intends to locate the role of local standard setters in institutional complexity, where multiple sources of pressure for change and continuity coexist. The existing research does not fully explore this since it tends to illustrate the way in which a particular interpretation concerning certain accounting standards prevails over time (Archel et al., 2011; Murphy and O'Connell, 2013; Pelger, 2015; Young, 2014).
It empirically examines and critiques the Japanese experience through the concepts of institutional complexity and translation that specify the relationship between the name and types of practice of accounting standards in the local context (Czarniawska and Sevón, 1996, 2005; Erlingsdóttir and Lindberg, 2005; Røvik, 2016; Sahlin and Wedlin, 2008). Data sources are texts produced (between 2001-2015) by the local accounting standard setter and relevant organisations that represent firms, the certified public accountants and regulatory agency, respectively.
The local accounting standard setter in Japan was exposed to competing pressures between change and maintenance, which was translated by the standard setter in Japan. Consequently, the translation led to an 'explosion' of local accounting standards ('pure' IFRS, Japanese GAAP, modified IFRS and US GAAP).
This article is the first attempt to systematically examine the role of a local standard setter under institutional complexity. It illustrates how institutional complexity is turned into divergent outcomes against the assumption of previous research that indicates multiple interpretations of particular accounting standards finally merging into a specific one.


IFRS, Local standard setter, Translation, Institutional perspective


Tokai University, Department of Business Administration

Takahiro ENDO
Research Institute for Economics and Business Administration
Kobe University
Rokkodai-cho, Nada-ku, Kobe
657-8501 Japan
Phone: +81-78-803-7036
FAX: +81-78-803-7059