Constituent Participation in Standard-Setting: The FASB's First 100 Statements

The participation of Financial Accounting Standards Board constituents (FASB) in the standard-setting process is essential for 2 primary reasons: 1. The due process procedures of the FASB provide a systematic approach to problem solving. 2. Participation is necessary to ensure the legitimacy of the FASB. Constituent participation in the standard-setting process leading to the first 100 Statements of Financial Accounting Standards (SFAS) was examined. The industry constituent group exhibited the highest level of participation in absolute terms, submitting 58% of all comment letters. When viewed in relative terms, however, industry participation was lower than that of several other constituent groups. The public accounting and banking groups ranked high in participation in both an absolute and a relative basis. Overall, on the first 100 SFASs, substantive standards elicited more participation than industry standards and amendments.