Abstract
The Securities and Exchange Commission (SEC) initiated rulemaking steps toward adopting International Financial Reporting Standards (IFRS) for US issuers in 2007, but it never issued a final decision. In this paper, we use public material and interviews to examine the links between commissioners' political ideology and their views on IFRS. We find that differences in political ideologies pervaded the debate on IFRS. In line with their belief in the advantages of “free markets,” Republican commissioners supported a move to IFRS, particularly in the form of giving US firms a choice between US GAAP and IFRS. Democratic commissioners were more reluctant to partly or fully replace the well-established system of US GAAP with IFRS, a step that was considered tantamount to deregulation and accompanied by concerns about the International Accounting Standards Board's governance. Our findings highlight the influence of political ideology on the regulatory process related to reporting issues. Thus, bipartisan rulemaking becomes unlikely in times of pronounced political confrontations, as recently evidenced by the SEC's rule on climate-related disclosures.
Original language | English |
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Journal | Journal of International Financial Management and Accounting |
Number of pages | 11 |
ISSN | 0954-1314 |
DOIs | |
Publication status | Published - 31 Jan 2025 |
Bibliographical note
Epub ahead of print. Published online: 31. January 2025.Keywords
- Democrats
- Ideology
- IFRS
- Interviews
- Republicans
- SEC
- Securities and Exchange Commission
- US reporting regulation