Lobbying and Audit Regulation in the EU

Accounting in Europe, Vol. 13 (2016), p. 381-403, DOI: 10.1080/17449480.2016.1255343

Posted: 1 Nov 2016 Last revised: 11 Jan 2019

See all articles by Marius Gros

Marius Gros

Niederrhein University of Applied Sciences; Goethe University Frankfurt - Department of Accounting and Auditing

Daniel Worret

Goethe University Frankfurt - Department of Accounting and Auditing

Date Written: October 31, 2016

Abstract

Lobbying activities play an important role in the development of new rules and regulations. However, because most lobbying behavior is not observable, there is still much to learn about, for example, lobbying strategies and their influence on the final regulatory output. We help fill this gap by analyzing comment letters submitted in response to the European Commission (EC) Green Paper on audit policy. We find that consistent with the theory of incentives and the presence of information asymmetries between rule-making bodies and interest groups, the highest participation within the consultation process came from auditors and preparers of financial statements. Additionally, our results suggest that these interest groups exhibit different strategic lobbying behaviors in terms of employing more self-referential arguments than other interest groups — potentially driven by informational advantages and strategic considerations. From an ex post perspective, we provide some evidence that self-referential argumentation strategies are more influential when expressing opposing views, whereas conceptually based argumentation strategies might be more influential when expressing supporting views. We contribute to a more detailed understanding of the role that lobbyists and argumentation strategies played in the recent EU audit policy reform, and we infer that lobbying activities might have led the EU commission to moderate its proposals to obtain interest groups’ support.

Keywords: Lobbying, Audit Regulation, EU Legislation, Standard-Setting, Strategies of Argumentation

JEL Classification: D72, K20, M42, M48

Suggested Citation

Gros, Marius F. and Worret, Daniel, Lobbying and Audit Regulation in the EU (October 31, 2016). Accounting in Europe, Vol. 13 (2016), p. 381-403, DOI: 10.1080/17449480.2016.1255343, Available at SSRN: https://ssrn.com/abstract=2861945

Marius F. Gros (Contact Author)

Niederrhein University of Applied Sciences ( email )

Germany

Goethe University Frankfurt - Department of Accounting and Auditing ( email )

Theodor-W.-Adorno-Platz 1
60323 Frankfurt
Germany

Daniel Worret

Goethe University Frankfurt - Department of Accounting and Auditing ( email )

Mertonstr. 17-25
60325 Frankfurt
Germany

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