The political processes that surround standard setting raise several concerns about its functioning and legitimacy. Because the actors preoccupied about the content of the standards have sometimes conflicting interests, the standard setter will have to find an acceptable solution for all.
The focus of our research is to analyze the environment in which IASB acts and to investigate its influence on the standard setting process. The theoretical framework of the examination is provided by the institutional theory used also by Fogarty (1992) to study the regulative work of FASB. Institutional theory asserts that organizations, in order to attract their legitimacy, resources and survival, obey to rules and requirements that result from predominant societal attitudes of what represents an acceptable practice and the views of important constituents (Scott, 1987; DiMaggio & Powell, 1991).
We perform a case-study illustrating the standard setting process of IAS 39 (maybe the most controversial international standard). The analysis will be based on comments letters submitted, decision summaries, press releases, final standards and their basis for conclusion. The examination of the evolution of IAS 39 pursues the identification of the main parties involved, their opinions, incentives, interests and the arguments they use to support their position, the sources of controversies and also the reaction of  the IASB to opposing arguments and the justification of its choices