Title: A longitudinal analysis of Corporate political activity towards the IASB: An analysis of context and firm-level antecedents as well as adopted strategies
Authors: Jorissen, Ann
Lybaert, Nadine
Orens, Raf
van der Tas, Leo
Issue Date: 2014
Conference: Workshop on European Financial Reporting edition:10 location:Regensburg, Germany date:25-26 September 2014
Abstract: Academic research focusing on the legitimacy and the standard setting process of the IASB is moving beyond the research focusing on the role of constituent participation in comment letter lobbying. To gain additional insights in the context in which the IASB sets its standards, this study sets out to examine the corporate political activity (CPA) adopted by corporations worldwide towards the IASB in the period 2002-2012. By doing so, this study is a response to the call for more research on the role of political influence on the IASB (Barth, 2008; Zeff, 2012). Since the IASB has the status of global accounting standard setter, this study also allows us to observe differences in the use of corporate political activity by corporations from a diverse political, legal and enforcement background. By combining insights from the management literature on corporate political activities with results of prior studies on accounting standard setting from the accounting literature, we develop hypotheses on the influence of firm-level, industry-level and institutional antecedents on the propensity of individual financial and non-financial corporations to influence the IASB by using an information strategy and/or a financing strategy. Based on the comparison of the profile of companies engaging in a relational information and financing strategy versus a transactional information and financing strategy, we observe for non-financial corporations a significant association between firm size, available firm slack and an institutional background characterized by high quality enforcement with the engagement in a relational information strategy towards the IASB. We do not observe for non-financial corporations a strong correlation between the intensity with which corporations engage in an information strategy and the intensity with which non-financial corporations engage in a financing strategy towards the IASB. With respect to financial corporations, we observe that only the largest financial corporations engage in a relational information strategy towards the IASB, irrespective of their country background or their financial situation. Moreover we notice a significant correlation between a financial corporation’s participation intensity in the discussion paper and exposure draft phase of the due process and the decision to engage in a financing strategy towards the IASB. The findings allow us to observe differences in the corporate political activities that corporations adopt between countries and between industries. Asian companies will engage much more often in a financing strategy whereas companies from jurisdictions familiar with private standard setting will engage more often in an information strategy. Financial corporations seems to choose to use more both strategies at the same time being an information as well as a financing strategy.
Publication status: published
KU Leuven publication type: IMa
Appears in Collections:Department of Accountancy and Taxation, Campus Carolus Antwerp
Faculty of Economics and Business (FEB) - miscellaneous

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