Investigating corporate management lobbying in the U.K. accounting standard‐setting process: a multi‐issue/multi‐period approach

Abstract

A large body of literature examines the motives of corporate managers to lobby accounting standard-setters. In general, studies confine their examination to single episodes of the standard-setting process (e.g., exposure draft). This article extends the literature by adopting a multi-issue/multiperiod approach to investigate corporate lobbying of the U.K.'s ASB. The findings suggest that the extent of corporate lobbying, defined on the basis of the frequency with which companies made submissions to all of the publications issued by the ASB over a six-year period, depends on the size of companies, the debt covenant costs they face and whether they are listed on a U.S. stock exchange. Separate analyses, however, involving (a) the frequency of lobbying on income-related issues and (b) the frequency of lobbying on disclosure issues revealed that, while all these three variables explain lobbying on income-related issues, only size is significant in explaining lobbying on disclosure issues. The results also suggest that the debt to equity ratio is an imperfect proxy for debt covenant costs.

Determinants of the Accounting Choice between Alternative Reporting Methods for Interests in Jointly Controlled Entities

“…Some studies measure the proximity to covenant limits based on leverage in relative rather than absolute terms (e.g. Georgiou, 2005). Thus, a negative relationship could be expected between a venturer with a leverage ratio above the industry median and the choice of proportionate consolidation.…”

Lobbying na Regulação Contábil: Evidências do Setor Petrolífero

“…This is because the manner in which binary variables are operationalized cannot properly capture the magnitude of the characteristic they aim to investigate. Deakin (1989), Georgiou and Roberts (2004), Georgiou (2005) and Koh (2011) are examples of studies that offer alternative methods of operationalizing these variables.…”

“…From the perspective of non-U.S. companies that adopt IFRS, Larson (1997) and Georgiou (2005) argued that changes in international standards can increase transaction costs by requiring accounting adjustments and the disclosure of additional information to meet the needs of U.S. investors. Thus, non-U.S. companies have an incentive to lobby the IASB to maintain the status quo.…”

Constituents’ Participation in the IASC/IASB’s due Process of International Accounting Standard Setting: A Longitudinal Analysis

“…Attributes do vary from standard to standard and that might explain why constituents participate in relation to some standards but not others. Further single-issue studies often suffer from small sample size (Georgiou 2005). So the limitations of single-issue studies can be overcome by using a multi-issue/multiperiod approach which involves studying participation behavior on more than one issue and over a period of time (Larson 1997;Georgiou 2005;Elbannan and McKinley 2006).…”