IDEAS home Printed from https://ideas.repec.org/a/taf/acctbr/v35y2005i2p129-146.html
   My bibliography  Save this article

The costs and benefits of increased accounting regulation: a case study of Lloyd's of London

Author

Listed:
  • D. Gwilliam
  • R. Macve
  • G. Meeks

Abstract

While a valuable literature exists on theoretical considerations in cost-benefit analysis (cba) of accounting regulation, and although the regulators themselves acknowledge the need for cost-benefit appraisal of their work, empirical analysis of the costs and benefits of changes in accounting regulation is almost non-existent. This paper attempts such an analysis for a step change in accounting and audit regulation—at Lloyd's between 1982 and 1985. It aims both to advance the cba methodology, and to inform debate about the evolution of the Lloyd's market. While the estimates do not show whether the changes produced an optimal level or form of Lloyd's regulation, they do suggest that, comparing changes, the extra benefits exceeded the extra costs—whether the chosen accounting unit is a private one—Lloyd's Names—or a social one.

Suggested Citation

  • D. Gwilliam & R. Macve & G. Meeks, 2005. "The costs and benefits of increased accounting regulation: a case study of Lloyd's of London," Accounting and Business Research, Taylor & Francis Journals, vol. 35(2), pages 129-146.
    • Handle: RePEc:taf:acctbr:v:35:y:2005:i:2:p:129-146
    DOI: 10.1080/00014788.2005.9729669
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00014788.2005.9729669
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00014788.2005.9729669?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Boden, Rebecca & Froud, Julie, 1996. "Obeying the rules: Accounting for regulatory compliance costs in the United Kingdom," Accounting, Organizations and Society, Elsevier, vol. 21(6), pages 529-547, August.
    2. Paul M. Healy & Amy P. Hutton & Krishna G. Palepu, 1999. "Stock Performance and Intermediation Changes Surrounding Sustained Increases in Disclosure," Contemporary Accounting Research, John Wiley & Sons, vol. 16(3), pages 485-520, September.
    3. McGarity,Thomas O., 1991. "Reinventing Rationality," Cambridge Books, Cambridge University Press, number 9780521402569.
    4. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
    5. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    6. Power, Michael, 1999. "The Audit Society: Rituals of Verification," OUP Catalogue, Oxford University Press, number 9780198296034, Decembrie.
    7. Swann, Peter & Temple, Paul & Shurmer, Mark, 1996. "Standards and Trade Performance: The UK Experience," Economic Journal, Royal Economic Society, vol. 106(438), pages 1297-1313, September.
    8. Ro, Bt, 1978. "Disclosure Of Capitalized Lease Information And Stock-Prices," Journal of Accounting Research, Wiley Blackwell, vol. 16(2), pages 315-340.
    9. Franks, Julian R. & Schaefer, Stephen M. & Staunton, Michael D., 1997. "The direct and compliance costs of financial regulation," Journal of Banking & Finance, Elsevier, vol. 21(11-12), pages 1547-1572, December.
    10. Gwilliam, David & Macve, Richard & Meeks, Geoffrey, 2000. "Principals and Agents in Crisis: Reforms of Accounting and Audit at Lloyd's in 1982-6," Accounting and Finance Discussion Papers 00-af44, Faculty of Economics, University of Cambridge.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Weetman, Pauline, 2006. "Discovering the ‘international’ in accounting and finance," The British Accounting Review, Elsevier, vol. 38(4), pages 351-370.
    2. Neil Rollings, 2007. "British business history: A review of the periodical literature for 2005," Business History, Taylor & Francis Journals, vol. 49(3), pages 271-292.
    3. Macve, R.H., 2015. "Fair value vs conservatism? Aspects of the history of accounting, auditing, business and finance from ancient Mesopotamia to modern China," The British Accounting Review, Elsevier, vol. 47(2), pages 124-141.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Andy Lardon & Marc Deloof, 2014. "Financial disclosure by SMEs listed on a semi-regulated market: evidence from the Euronext Free Market," Small Business Economics, Springer, vol. 42(2), pages 361-385, February.
    2. Christof Beuselinck & Marc Deloof & Sophie Manigart, 2008. "Private Equity Investments and Disclosure Policy," European Accounting Review, Taylor & Francis Journals, vol. 17(4), pages 607-639.
    3. Thorsten Knauer & Arnt Wöhrmann, 2010. "Rahmenbedingungen, Charakteristika und Konsequenzen freiwilliger Unternehmenspublizität – State of the Art und neue Perspektiven der empirischen Forschung," Metrika: International Journal for Theoretical and Applied Statistics, Springer, vol. 21(3), pages 235-254, November.
    4. Shu-Miao Lai & Chih-Liang Liu & Taychang Wang, 2014. "Increased disclosure and investment efficiency," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 21(3), pages 308-327, September.
    5. Knauer, Thorsten, 2010. "Relevanz, Qualität und Determinanten der externen Unternehmenspublizität zum Humankapital: Eine empirische Bestandsaufnahme der HDAX-Unternehmen," Arbeitspapiere des Lehrstuhls für Betriebswirtschaftslehre, insbesondere Controlling 13-1, University of Münster, Chair of Management Accounting.
    6. Conheady, Brian & McIlkenny, Philip & Opong, Kwaku K. & Pignatel, Isabelle, 2015. "Board effectiveness and firm performance of Canadian listed firms," The British Accounting Review, Elsevier, vol. 47(3), pages 290-303.
    7. Wijayana, Singgih & Gray, Sidney J., 2018. "Capital market consequences of cultural influences on earnings: The case of cross-listed firms in the U.S. stock market," International Review of Financial Analysis, Elsevier, vol. 57(C), pages 134-147.
    8. Timothy Fogarty & Michel Magnan & Garen Markarian & Serge Bohdjalian, 2009. "Inside Agency: The Rise and Fall of Nortel," Journal of Business Ethics, Springer, vol. 84(2), pages 165-187, January.
    9. Laivi Laidroo, 2008. "Measuring Public Announcementsí Disclosure Quality on Tallinn, Riga and Vilnius Stock Exchanges," Working Papers 181, Tallinn School of Economics and Business Administration, Tallinn University of Technology.
    10. Luminita Enache & Khaled Hussainey, 2020. "The substitutive relation between voluntary disclosure and corporate governance in their effects on firm performance," Review of Quantitative Finance and Accounting, Springer, vol. 54(2), pages 413-445, February.
    11. Hoshik Shim, 2020. "Disclosure Frequency, Information Environment, and Cost of Capital under Regulation Fair Disclosure in the Korean Market," Sustainability, MDPI, vol. 12(14), pages 1-28, July.
    12. Ying Li & Jacky So & Jia Yuan, 2018. "Voluntary Verifiable Information Disclosure And Loan Funding Performance: Evidence From Paipaidai In China," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 65(02), pages 419-441, March.
    13. Diana Hechavarría & Charles Matthews & Paul Reynolds, 2016. "Does start-up financing influence start-up speed? Evidence from the panel study of entrepreneurial dynamics," Small Business Economics, Springer, vol. 46(1), pages 137-167, January.
    14. Loukil, Nadia & Yousfi, Ouidad, 2010. "Firm's information environment and stock liquidity: evidence from Tunisian context," MPRA Paper 28699, University Library of Munich, Germany, revised Feb 2011.
    15. Andres, Christian & Cumming, Douglas & Karabiber, Timur & Schweizer, Denis, 2014. "Do markets anticipate capital structure decisions? — Feedback effects in equity liquidity," Journal of Corporate Finance, Elsevier, vol. 27(C), pages 133-156.
    16. Liu, Benjamin & Skully, Michael, 2005. "The determinants of mortgage yield spread differentials: Securitization," Journal of Multinational Financial Management, Elsevier, vol. 15(4-5), pages 314-333, October.
    17. Matthias Kiefer & Edward Jones & Andrew Adams, 2016. "Principals, Agents and Incomplete Contracts: Are Surrender of Control and Renegotiation the Solution?," CFI Discussion Papers 1603, Centre for Finance and Investment, Heriot Watt University.
    18. Vera Lucia M. Cunha & M. Dinis Mendes, 2017. "Financial Determinants of Corporate Governance Disclosure: Portuguese Evidence," Athens Journal of Business & Economics, Athens Institute for Education and Research (ATINER), vol. 3(1), pages 21-36, January.
    19. Mustaruddin Mustaruddin & Aristya Dinata & Wendy Wendy & Anwar Azazi, 2017. "Asymmetric Information and Capital Structure: Empirical Evidence from Indonesia Stock Exchange," International Journal of Economics and Financial Issues, Econjournals, vol. 7(6), pages 8-15.
    20. Van Geyt, Debby & Van Cauwenberge, Philippe & Vander Bauwhede, Heidi, 2014. "Does high-quality corporate communication reduce insider trading profitability?," International Review of Law and Economics, Elsevier, vol. 37(C), pages 1-14.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:acctbr:v:35:y:2005:i:2:p:129-146. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RABR20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.