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Lobbying Activities of Financial Statement

Autor:   •  February 11, 2012  •  Research Paper  •  486 Words (2 Pages)  •  1,513 Views

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Prior literature on the lobbying activities of financial statement users can be grouped into studies relating to national

accounting standard-setters and those relating to the IASC/IASB. In the context of the US regulatory environment, Tandy and

Wilburn (1992) reported that, out of a total of 13,369 comment letters received by FASB in relation to the adoption of its first

100 accounting standards, only 239 (185 from individuals and 54 from representative organisations) were submitted by

report users. More recently Hochberg, Sapienza, and Vissing-Jørgensen (2009) investigated lobbying in relation to the passage

of the Sarbanes-Oxley (SOX) Act. They reported that, out of a total number of 1,948 letters which they analysed, 125 (6.4%)

were from investor groups. This is not a negligible number but it is substantially lower than the number of letters submitted

by preparers, 629 (32.2%).

In the context of the UK’s Accounting Standards Board (ASB) process, Weetman, Davie, and Collins (1996) investigated

lobbying on the issue of the Operating and Financial Review (ASB, 1993). They reported that, out of a total of 104 comment

letters, 14 were submitted by report user groups. In addition to the examination of comment letters, the authors undertook

interviews with 20 financial statement users, partly in order to establish the reasons why they had not made written

submissions. They noted that only one respondent was able to articulate a clear reason for not writing: that analysts do not

expect to be influential in the lobbying process, since it is the preparers of accounts who hold the key to consensus. Others

offered reasons such as a tradition of not responding in writing,

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