How and why corporate governance models affect choices of Generally Accepted Accounting Principles

Henghsiu Lin and Mari Paananen

International Journal of Accounting, Auditing and Performance Evaluation, 2006, vol. 3, issue 4, 409-433

Abstract: We investigate factors determining firm's governance models to assess how methods of resolving information asymmetry affect accounting policy choices. Companies with stakeholder governance models tend to use private communication to resolve information asymmetry. Our results suggest that firms with a stakeholder governance model choose to report under their home GAAP over IFRS/US GAAP when listed in the USA. We infer these results to indicate that these firms have contractual agreements with other stakeholders such as creditors and/or they want to avoid their main stakeholders perceiving they no longer have access to relatively more private information than other external stakeholders.

Keywords: corporate governance models; international accounting; IFRS; US GAAP; stakeholders; shareholders; Generally Accepted Accounting Principles; accounting policy. (search for similar items in EconPapers)
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijaape:v:3:y:2006:i:4:p:409-433

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