Auditor Lobbying on Accounting Standards

EXECUTIVE SUMMARY  - Tendency the governmental growth that leads to business standards may wage insights into both their procedural legitimacy and how they will yet be old. In a drawing of the role of starring auditors in the business standard-setting activity, the authors ply a systematised characterization of auditors' dynamic incentives. They also see how those incentives persuade auditor lobbying crossways nearly every financial news classic issued from 1973 through 2006. Boilersuit, results suggest that the auditors' own incentives movability a salient role in their lobbying activities for the rules of U.S. GAAP (Generally Received Register Principles).

AUTHOR ABSTRACT

We see how Big N auditors' dynamical incentives touch their comment-letter lobbying on U.S. Assemblage over the eldest thirty-four life of the FASB (1973-2006). We examine the work of auditors' lobbying incentives arising from troika canonical factors: managing expected litigation and restrictive costs; catering to clients' preferences for malleability in GAAP; and existence conceptually aligned with the FASB, especially on the use of clean values in register. We hear grounds that auditor lobbying is unvoluntary by rife standards of litigation and regulatory investigating and by hold for fair-value occupation. But we comprehend no grounds that catering to clients' preferences for flexibleness in GAAP drives auditor lobbying. Broadly, our packing offers the ordinal large-sample descriptive reasoning of the persona of Big N auditors in the line standard-setting process