Regulatory competition among accounting standards within and across international boundaries
AbstractMost financial reporting jurisdictions across the world allow a local monopoly in financial reporting standards for publicly held corporation. In the United States, for example, the statutory authority over these standards is vested in the Securities and Exchange Commission, who delegates the task of writing standards to the Financial Accounting Standards Board, retaining an oversight function for itself. In some countries these standards are specified through statutes in varying levels of detail. Few countries permit their corporations to choose among two or more sets of competing standards; monopoly is the reigning norm. This paper examines regulatory competition as a model for writing and implementing corporate financial standards. Under this model, two or more approved standard-setting bodies are allowed to compete for the allegiance of the reporting entities. Each corporation can choose which of the two or more sets of competing standards it wishes to use in preparing its financial reports. Corporations must choose an entire set of standards in toto, clearly mark the reports with the set of standards used to prepare them, and pay a fee to the body who wrote the standards. We examine the consequences of such regulatory competition for the quality and efficiency of standards, quality of information provided to shareholders and other interested parties, and the efficiency of corporate governance
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Accounting and Public Policy.
Volume (Year): 21 (2002)
Issue (Month): 3 ()
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Web page: http://www.elsevier.com/locate/jaccpubpol
Other versions of this item:
- Shyam Sunder & Journal Accounting, 2002. "Regulatory Competition Among Accounting Standards Within and Across International Boundaries," Yale School of Management Working Papers ysm317, Yale School of Management, revised 01 Feb 2003.
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- Shizuki Saito, 2011. "Accounting Standards and Global Convergence Revisited: Social Norms and Economic Concepts," The Japanese Accounting Review, Research Institute for Economics & Business Administration, Kobe University, vol. 1, pages 105-117, December.
- Shyam Sunder, 2011. "Paradox of Writing Clear Rules: Interplay of Financial Reporting Standards and Engineering," The Japanese Accounting Review, Research Institute for Economics & Business Administration, Kobe University, vol. 1, pages 119-130, December.
- Kothari, S.P. & Ramanna, Karthik & Skinner, Douglas J., 2010. "Implications for GAAP from an analysis of positive research in accounting," Journal of Accounting and Economics, Elsevier, vol. 50(2-3), pages 246-286, December.
- Roland Königsgruber, 2010. "A political economy of accounting standard setting," Journal of Management and Governance, Springer, vol. 14(4), pages 277-295, November.
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