Toward a Positive Theory of Disclosure Regulation: In Search of Institutional Foundations
Year: 2013
Type: article
Abstract: ABSTRACT This article develops a theory of standard-setting in which accounting standards emerge endogenously from an institutional bargaining process. It provides a unified framework with investment and voluntary disclosure to examine the links between regulatory institutions and accounting choice. We show that disclosure rules tend to be more comprehensive when controlled by a self-regulated professional organization than when they are under the direct oversight of elected politicians. These institutions may not implement standards desirable to diversified investors and, when voluntary disclosures are possible, allowing choice between competing standards increases market value over a single uniform standard. Several new testable hypotheses are also offered to explain differences in accounting regulations. JEL Classifications: C78; D02; D04; D71; D72; D79; G28; L51; M41; M48.
Source: The Accounting Review
DOI: 10.2308/accr-50388
Authors: Jeremy Bertomeu, Edwige Cheynel
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W3124548822