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

Accounting, Organizations, and Society, Vol. 25, No. 1, January 2000

Posted: 15 Feb 2000

See all articles by Stuart McLeay

Stuart McLeay

University of Sussex; The University of Sydney

Dieter Ordelheide

Goethe University Frankfurt - Faculty of Economics and Business Administration

Steven Young

Lancaster University - Department of Accounting and Finance

Abstract

This paper examines the impact of constituent lobbying activity on accounting regulators during the transformation of the Fourth European Company Law Directive into German accounting law. While the evolution of accounting rules is an issue of international importance, extant research is characterised by its focus on the U.S. and similar financial reporting regimes. This paper, on the other hand, documents empirical evidence within a fundamentally different regulatory regime where, until this year?s changes in Germany, the legislator assumed primary responsibility for accounting rule-development. Using detailed published commentaries prepared by representative organisations and relating to draft accounting legislation, we identify the preferences of the three primary German constituencies in this context (preparers, auditors, and academia). Their relative influence is assessed by examining the extent to which the constituents? stated preferences are ultimately reflected in law. Despite substantial differences in the organisational structure of the rule-making system at the time, the results display similarities to those reported previously for the standard-setting process in the English-speaking countries in that no single lobbyist, or coalition of lobbyists, is shown to dominate the rule-development process. Thus, while the main effect models indicate that preparers exerted the greatest influence on the decisions of the German legislature, when the empirical model is extended to include all two-way interaction effects, the influence of the preparer group is shown to be much lower and crucially dependent on the support of at least one of the remaining lobby groups.

Note: This is a description of the paper and not the actual abstract.

JEL Classification: M41, M44, L50, K22

Suggested Citation

McLeay, Stuart and Ordelheide, Dieter and Young, Steven, Constituent Lobbying and its Impact on the Development of Financial Reporting Regulations: Evidence from Germany. Accounting, Organizations, and Society, Vol. 25, No. 1, January 2000, Available at SSRN: https://ssrn.com/abstract=200468

Stuart McLeay (Contact Author)

University of Sussex ( email )

Falmer, Brighton BN1 9SL
United Kingdom

The University of Sydney ( email )

Cnr. of Codrington and Rose Streets
Sydney, NSW 2006
Australia

Dieter Ordelheide

Goethe University Frankfurt - Faculty of Economics and Business Administration

Mertonstrasse 17-25
Frankfurt am Main, D-60325
Germany

Steven Young

Lancaster University - Department of Accounting and Finance ( email )

The Management School
Lancaster LA1 4YX
United Kingdom
+441 5245-94242 (Phone)
+441 5248-47321 (Fax)

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