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Vol 41 No 1 (2026): January

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Submitted
Jul 21, 2024
Accepted
Apr 23, 2025
Published
Jan 28, 2026
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Analysis of Financial Accounting Standard-Setting Institutions: Government Versus Private

https://doi.org/10.22146/jieb.v41i1.15008
Ade Ilham Ilahi
adeilhamilahi@mail.ugm.ac.id
Department of Accounting, Faculty of Economics and Business, Universitas Gadjah Mada, Yogyakarta, 55281, Indonesia
Ainun Na'im
Department of Accounting, Faculty of Economics and Business, Universitas Gadjah Mada, Yogyakarta, 55281, Indonesia
https://orcid.org/0009-0008-0772-8826
Singgih Wijayana
Department of Accounting, Faculty of Economics and Business, Universitas Gadjah Mada, Yogyakarta, 55281, Indonesia
https://orcid.org/0000-0002-8648-1268
Aviandi Okta Maulana
Department of Accounting, Faculty of Economics and Business, Universitas Gadjah Mada, Yogyakarta, 55281, Indonesia
https://orcid.org/0000-0002-7373-4887

Corresponding Author(s) : Ade Ilham Ilahi

adeilhamilahi@mail.ugm.ac.id

Journal of Indonesian Economy and Business, Vol 41 No 1 (2026): January

Abstract

Introduction/Main Objectives: This study analyzes the legitimacy of Indonesia’s financial accounting standard-setting institutions. Background Problems: The enactment of the Law on Development and Strengthening of the Financial Sector has resulted in changes to the financial regulations, including an institutional arrangement for financial accounting standard setting. The law regulates that the standard setting should be conducted by a standard-setting committee established by a presidential decree. This is different from the current system, where the standard-setting process is conducted by a board under the Institute of Indonesia Chartered Accountants, a private organization of professional accountants in Indonesia. The new scheme may increase the govern­ment's role in the standard-setting process, which may hinder independence. Novelty: This study adds to the literature on the legiti­macy of standard-setting institutions by focusing on the stakeholders’ perspectives. Research Methods: A qualitative approach, through semi-structured interviews with stakeholders from various professional backgrounds that relate to financial reporting, was conducted to compare the legitimacy of private versus government institutions that set financial accounting standards. Finding/Results: Each of the institutions—both the government’s and the private one under the IAI—has various positive and negative effects on the legitimacy of the standard-setting process. Collaboration between the government and the private sector, such as involving the IAI in determining the financial accounting standard-setter, has stronger legitimacy than a sole government standard-setting insti­tution. Conclusion: The results of this study contribute to the development of the legitimacy theory and provide inputs for the further implementation of the new law.

Keywords

P2SK law IAI KSLK institutional legitimacy stakeholders financial accounting standard-setting institution
Ilahi, A. I., Ainun Na’im, Singgih Wijayana, & Aviandi Okta Maulana. (2026). Analysis of Financial Accounting Standard-Setting Institutions: Government Versus Private. Journal of Indonesian Economy and Business, 41(1), 28 - 51. https://doi.org/10.22146/jieb.v41i1.15008
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Author Biographies

Ade Ilham Ilahi, Department of Accounting, Faculty of Economics and Business, Universitas Gadjah Mada, Yogyakarta, 55281, Indonesia

Ade Ilham Ilahi is an alumnus of the Master of Accounting program in the Department of Accounting, Faculty of Economics and Business, Universitas Gadjah Mada, Indonesia. He earned his Bachelor of Accounting from the Department of Accounting at Universitas Hasanuddin. Currently, he serves as an accountant for a prominent Chinese Foreign Direct Investment (FDI) enterprise operating within the Indonesia Morowali Industrial Park (IMIP), where his firm specializes in large-scale stainless steel material processing. His scholarly work and research interests primarily focus on accounting standard-setting processes and financial accounting. This academic pursuit complements his professional role, as working within an FDI environment allows him to observe firsthand the practical challenges of aligning Indonesian Financial Accounting Standards (SAK) with the reporting requirements of foreign parent entities and the complexities of the global stainless steel supply chain.

Ainun Na'im, Department of Accounting, Faculty of Economics and Business, Universitas Gadjah Mada, Yogyakarta, 55281, Indonesia

Ainun Na’im is a Professor of Accounting at the Faculty of Economics and Business Universitas Gadjah Mada; Chair of the Higher Education Institute of Nahdhatul Ulama; President Commissioner of the Regional Bank of Yogyakarta, and a Member of the Oversight Board of the Indonesian Association of Accountants. He has various backgrounds either in industry or bureaucracy. Previously he served as the Secretary General of Ministries in education, culture, research, and technology, and as Chief Financial Officer of Pertamina, an Indonesian State-Owned Integrated Oil & Gas Company. Ainun was also the Dean of the Faculty of Economics and Business Universitas Gadjah Mada.

During his time in Pertamina, Ainun involved in transforming Pertamina from a State Oil & Gas Company (Perusahaan Negara) to become a Corporation, was responsible for managing all of Pertamina subsidiaries and joint ventures in various industries either those in oil & gas, power plant, or  those in other non-energy related industries. He had also responsibilities to supervise the development of project financing scheme for LNG Plant and oil exploration.

As an academician, Ainun is teaching research methodology and strategic management, doing research in the fields of sustainability, decision-making, financial reporting and governance, and public policy and regulation in accounting. He graduated with a Ph.D. degree in Business Administration from Temple University USA in 1996. His recent research the area of accounting regulation, sustainability and governance published in refereed journals such as Journal of Contemporary Accounting and Economics, Business strategy and Development, and Cogent Business & Management.

Singgih Wijayana, Department of Accounting, Faculty of Economics and Business, Universitas Gadjah Mada, Yogyakarta, 55281, Indonesia

Singgih Wijayana is an Associate Professor at the Accounting Department, Faculty of Economics and Business, Gadjah Mada University (GMU). He now serves as Chief Financial Officer (Finance Director) at the Academic Hospital of GMU. He also works for Injourney Destination Management-State Owned Company as Committee of Investment and Risk Management. He was Head of the Accounting Department, Vice Head of MBA Program, and Head of Accounting Undergraduate Program. He served as a member of the Indonesian Accounting Standards Setting Boards for six years. He earned his bachelor’s and master’s degree in accounting from GMU. His Ph.D. degree was obtained in 2012 from Monash University, majoring in accounting and finance. His research interest is cross-country analyses of financial reporting quality and capital market research. His research paper has been published in the top tier journals, among others are International Review of Financial Analysis, Management International Review, Information and Management, and The International Journal of Accounting. His most recent studies have been accepted for publication in the Journal of International Accounting, Auditing, and Taxation, Emerging Markets Review, and Sustainable Development Journal. Here is his profile at the scopus: https://www.scopus.com/authid/detail.uri?authorId=57201382212 . He received several awards, including the Best Paper Award at the South Africa and Taiwan Accounting Association conferences. He was an awardee of Deloitte-IAAER Scholar Program 2013-2015, DIKTI-Academic Mobility 2015, Fulbright Scholar Program 2017/2018, and 2020 World Class Professor Program-Indonesia Minister of Education and Culture. He was a visiting scholar at the University of Sydney in 2015, 2016, 2018, at the University of Dayton-Ohio U.S. during 2017 – 2018, and the University of Melbourne, Australia in 2025. He also received the Best Publication Award and the Best Faculty Member Award from GMU in 2019.

Aviandi Okta Maulana, Department of Accounting, Faculty of Economics and Business, Universitas Gadjah Mada, Yogyakarta, 55281, Indonesia

Aviandi Okta Maulana is assistant professor at the Department of Accounting, Universitas Gadjah Mada (UGM) Indonesia where he has been a faculty member since 2020. He earned his Bachelor’s, Accounting Profession, and Master of Accounting degree in Accounting Department, Faculty of Economics and Business, Universitas Gadjah Mada, Indonesia. Besides, he completed his Ph.D. in Accounting from Henley Business School, University of Reading, UK. His research interests lie in the areas of accounting standards-setting, taxation, and auditing. He has collaborated actively with other researchers from various fields in many research projects. He successfully published many articles in different reputable journals.

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