The Localised Accounting Environment in the Institutionalisation of Fair Value Accounting in Indonesia

Purpose: This study investigates the role of the local accounting environment and actors as agencies in the implementation of fair value standards within Indonesia, as an emerging country case study. Design/methodology/approach: This study uses semi-structured interviews with important actors in the Indonesian accounting profession, standard setting and regulation environment regarding the implementation of fair value accounting. This study also uses information obtained from press releases and newspapers to provide a more comprehensive picture of fair value implementation in Indonesia. Findings: The role of actors is important in understanding how global accounting standards, in particular those which exercise a significant degree of professional judgement, are implemented in the local context. This study finds that actors conduct purposive actions in the political, organisation-field and organisation levels in the institutionalisation of fair value standards within Indonesia. These actors conduct purposive actions, construct interests and seek legitimacy during the process of institutionalisation fair value standards into the local Indonesian context. Originality/value: This study applies Institutional Work to explain how the fair value standards are institutionalised within a local context characterised by unique actors’ role and purposive action. Research implications: First, different local contexts, including communities and actors within a particular country, will react differently toward the diffusion and implementation of global standards and may conduct actions to change institutions. Second, different environment and social constructs can influence the successful implementation of IFRS. Keywords: Local Context, Actors, Institutional Work, Fair Value, Indonesia Paper Type: Research Paper