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http://ssrn.com/abstract=1726669
 
 

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Global Accounting Convergence and the Potential Adoption of IFRS by the U.S. (Part II): Political Factors and Future Scenarios for U.S. Accounting Standards


Luzi Hail


University of Pennsylvania - The Wharton School

Christian Leuz


University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI); Center for Financial Studies (CFS); University of Pennsylvania - Wharton Financial Institutions Center; CESifo Research Network

Peter D. Wysocki


University of Miami - School of Business Administration

December 16, 2010

Accounting Horizons, Vol. 24, No. 4, pp. 567-588, 2010

Abstract:     
This is the second article of a two-part series analyzing the economic and policy factors related to the potential adoption of IFRS by the United States. In Part I (see Hail et al. 2010), we develop the conceptual framework for our analysis and discuss economic factors driving the costs and benefits associated with IFRS adoption. In this part, we provide an analysis of the political factors related to the possible U.S. adoption of IFRS, present several scenarios for the evolution of U.S. accounting standards, and outline opportunities for future research on global accounting standards and regulation. We start with a general discussion of the standard-setting process in accounting and how a U.S. switch to IFRS might affect worldwide competition among accounting standards and standard setters. We discuss potential political ramifications of such a decision on the standard-setting process in the United States, as well as on the governance structure of the International Accounting Standards Board. Drawing on our economic framework and the insights from our analysis, we conclude by outlining several possible ways of how U.S. accounting standards could evolve. These scenarios include maintaining U.S. GAAP, letting firms decide whether and when to adopt IFRS, mandating full compliance with IFRS within a prespecified schedule, or creating a competing U.S. GAAP-based set of accounting standards that could serve as a global alternative to IFRS.

Keywords: Accounting Regulation, Standard Setting, U.S. Equity Markets, Mandatory Disclosure, Political Economy, Harmonization

JEL Classification: F50, G15, G38, K22, M41, M48, O51

Accepted Paper Series





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Date posted: December 18, 2010  

Suggested Citation

Hail, Luzi and Leuz, Christian and Wysocki, Peter D., Global Accounting Convergence and the Potential Adoption of IFRS by the U.S. (Part II): Political Factors and Future Scenarios for U.S. Accounting Standards (December 16, 2010). Accounting Horizons, Vol. 24, No. 4, pp. 567-588, 2010. Available at SSRN: http://ssrn.com/abstract=1726669

Contact Information

Luzi Hail (Contact Author)
University of Pennsylvania - The Wharton School ( email )
3641 Locust Walk
Philadelphia, PA 19104-6365
United States
215-898-8205 (Phone)
215-573-2054 (Fax)
Christian Leuz
University of Chicago - Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-834-1996 (Phone)
HOME PAGE: http://chicagobooth.edu/fac/christian.leuz
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
HOME PAGE: http://www.nber.org
European Corporate Governance Institute (ECGI)
Brussels
Belgium
HOME PAGE: http://www.ecgi.org
Center for Financial Studies (CFS) ( email )
Grüneburgplatz 1
Frankfurt am Main, 60323
Germany
University of Pennsylvania - Wharton Financial Institutions Center
3641 Locust Walk
Philadelphia, PA 19104-6218
United States
CESifo Research Network
Poschinger Str. 5
Munich, DE-81679
Germany
Peter D. Wysocki
University of Miami - School of Business Administration ( email )
Department of Accounting - K/E 308
5250 University Drive
Coral Gables, FL 33146-6531
United States
305-284-8618 (Phone)
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