AN ORGANIZATION THEORY PERSPECTIVE ON THE CORPORATE DECISION TO OPPOSE FASB STANDARDS

Abstract

In order to identify the circumstances in which companies are most likely to oppose the financial reporting requirements put forth by the Financial Accounting requirements Board (FASB), this study proposes a theoretical framework. Three levels of study are used to identify factors that influence corporate resistance to FASB standards: the standard, the corporation, and the industry in which the corporation operates. Summaries of the determinants' impacts at each of these three levels are proposed as propositions, and recommendations for testing the claims are provided. There is additional discussion of the implications for accounting regulation theory and practice. The paper's main objective is to improve our knowledge of the factors that influence business opposition to FASB standards so that accounting regulators can more skilfully oversee the adoption of accounting standards.