Business Ethics Essay Example | Topics and Well Written Essays - 2500 words - 2

Business Ethics - Essay ExampleOther investigate on lobbying behaviour and the effect of a proposed financial accounting stock(a) on pro forma net income provides mixed results. For example, Watts and Zimmerman (1978) report that economic self-interests motivate a large firm to lobby for an accounting standard that reduces pro forma net income.Yet, other studies (Martens and Stevens, 1993 Dechow et al., 1996) find no relationship between lobbying behaviour and the effect of the proposed standard on net income. The present study extends prior research by examining whether economic self-interests affect corporate lobbying on disclosure, especially onPrior to the 1993 photo Draft (ED) on FAS 123, Accounting for Stock-Based Compensation, corporations provided relatively little development on the value of stock-based compensation (SBC) held by top management. Essentially, corporations reported the SBC for only the top phoebe bird executives and only in annual proxy statements as requi red by the U.S. Securities and Exchange Commission (SEC).The ED proposed recognizing for the first time in annual reports the sum up of SBC for all employees. Comment garner to the FASB on FAS 123 almost exclusively opposed recognition of SBC. However, as Walker and Robinson (1993) note, a careful analysis of the substance of definition letters (i.e., analysis beyond simply counting yes/no votes on recognition) can provide additional insights into the politics of the standard-setting process. The current analysis of the comment letters reveals that managers supported varying venues and formats of disclosure. Thus, the varying responses to the FASB on the ED for FAS 123 provide a unique opportunity to examine whether economic self-interest motivates lobbying on venues and formats of disclosure of information (Breton Wall Street Journal, 5 November 1993).The results of this study indicate that differences in corporate lobbying positions on disclosure are related to the value of cor porate SBC. In