Determinants of Corporate Participation in the IFRS 4 (Insurance Contracts) Replacement Process
42 Pages Posted: 13 Nov 2013
Date Written: November 13, 2013
This study examines the determinants of financial firms’ lobbying behaviour in the replacement process of IFRS 4 Insurance Contracts. Based on comment letters to International Accounting Standards Board’s (IASB) Exposure Draft 2010/8 we investigate firms’ lobbying decisions and their long-term lobbying intensity. Using an international sample of publicly listed financial firms, we show that insurance companies and financially constrained IFRS firms are more likely to lobby the IASB. We also examine the long-term lobbying activity in the IFRS 4 replacement process during the years 2007-2010. We find that insurance companies and firms with dispersed ownership lobby more. Our results are stronger for IFRS firms compared to US-GAAP users. Overall, we document intense lobbying by financial firms, and present results that are largely consistent with economic consequences of anticipated accounting changes being the main driver of firms’ lobbying behaviour. These results are in line with prior findings for non-financial firms.
Keywords: standard setting, IASB, corporate lobbying, financial firms, IFRS 4
JEL Classification: D72, M41, M48
Suggested Citation: Suggested Citation