Accounting Standard Setting in Two Political Contexts
In addition to private-sector standard setters, a number of public actors are involved in accounting standard setting. So the question arises toward which actor lobbying will be directed by firms or individuals wishing to influence the outcome of the standard setting process. This chapter presents a simple game-theoretic analysis of the standard setting process to identify the pivotal actor who will be the target of influencing activities. Analysis of the model suggests that “political” lobbying is more likely to happen in the EU than in the US. Furthermore it is suggested that if the relevant standard setters wish to achieve harmonization of accounting standards between the EU and the US, European companies have more lobbying leverage than their American counterparts because there are more European veto players than American ones. It is argued that in the future these structural forces will become more important as the historic intellectual dominance of the FASB over the IASB recedes.
KeywordsAccounting Standard International Financial Reporting Standard Veto Player Veto Power Financial Account Standard Board
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