The “due process” system of the FASB encourages public input into the standard-setting process. It invites written comments, holds public hearings, and often changes proposed standards in response to this input. However, some observers have suggested that this process makes the setting of accounting standards less a technical exercise and more a political one. Parties are known to lobby for or against proposed standards according to their economic interests.
1. How would accounting standard setting be improved by eliminating lobbying?
2. How would accounting standard setting be harmed by eliminating lobbying?