Chapter

Constituent Lobbying and Its Impact on the Development of Financial Reporting Regulations: Evidence from Germany

Stuart McLeay, Dieter Ordelheide and Steven Young

in The Economics and Politics of Accounting

Published in print March 2004 | ISBN: 9780199260621
Published online January 2005 | e-ISBN: 9780191601668 | DOI: http://dx.doi.org/10.1093/0199260621.003.0012
 Constituent Lobbying and Its Impact on the Development of Financial Reporting Regulations: Evidence from Germany

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An examination is made of the impact of constituent lobbying activity on accounting regulators during the transformation of the Fourth European Company Law Directive into German accounting law. Using detailed published commentaries prepared by representative organizations on draft accounting legislation, evidence is provided concerning the preferences of the three primary German accounting constituencies – industry preparers, auditors, and academic experts. Initially, a model that merely distinguishes between the three constituencies suggests that the industry lobby group representing preparers exerts the greatest influence on the decisions of the German legislature. However, when the empirical model is extended to include all two-way interaction effects, the relative power of preparers is seen to be far lower, with the influence exerted by industry depending crucially on the support of at least one of the remaining lobby groups.

Keywords: academic experts; accounting; accounting law; accounting regulations; auditors; constituent lobbying; financial reporting; financial reporting regulations; German accounting law; Germany; industry lobby group; lobby groups; lobbying

Chapter.  13260 words.  Illustrated.

Subjects: Financial Markets

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