Auditor lobbying on accounting standards
By: Abigail Allen, Karthik Ramanna, Sugata Roychowdhury
Contributors: Ramanna, Karthik, author; Roychowdhury, Sugata, author; Harvard Business School
Series: Working paper / Harvard Business School -- 15-055; Working paper (Harvard Business School) -- 15-055
Publisher: Harvard Business School
Published: 2014
Place of publication: Boston]
Language: eng
Number of pages: 57
Description: We examine how Big N auditors' changing incentives impact their comment-letter lobbying on U.S. GAAP over the first thirty-four years of the FASB (1973-2006). We examine the influence of auditors' lobbying incentives arising from three basic factors: managing expected litigation and regulatory costs; catering to clients' preferences for flexibility in GAAP; and being conceptually aligned with the FASB, particularly on the use of fair values in accounting. We find evidence that auditor lobbying is driven by prevailing standards of litigation and regulatory scrutiny and by support for fair-value accounting. But we find no evidence that catering to clients' preferences for flexibility in GAAP drives auditor lobbying. Broadly, our paper offers the first large-sample descriptive analysis of the role of Big N auditors in the accounting standard-setting process.
Notes: "December 2014" -- Publisher's website.

Includes bibliographical references (pages 37-40).