Global Governance in Accounting: Rebalancing Public Power and Private Commitment

260 Pages·2008·1.101 MB·English

by  Jochen Zimmermann, Jörg R. Werner, Philipp B. Volmer (auth.)

Global Governance in
Accounting
Rebalancing Public Power and Private
Commitment
Jochen Zimmermann, Jörg R. Werner and
Philipp B. Volmer
TransformationsoftheState
Series Editors: Achim Hurrelmann, Carleton University, Canada; Stephan Leibfried,
UniversityofBremen,Germany;KerstinMartens,UniversityofBremen,Germany;Peter
Mayer,UniversityofBremen,Germany.
Titlesinclude:
JoanDeBardelebenandAchimHurrelmann(editors)
DEMOCRATICDILEMMASOFMULTILEVELGOVERNANCE
Legitimacy,RepresentationandAccountabilityintheEuropeanUnion
KlausDingwerth
THENEWTRANSNATIONALISM
TransnationalGovernanceandDemocraticLegitimacy
AchimHurrelmann,SteffenSchneiderandJensSteffek(editors)
LEGITIMACYINANAGEOFGLOBALPOLITICS
AchimHurrelmann,StephanLeibfried,KerstinMartensandPeterMayer(editors)
TRANSFORMINGTHEGOLDEN-AGENATIONSTATE
KerstinMartens,AlessandraRusconiandKathrinLeuze(editors)
NEWARENASOFEDUCATIONGOVERNANCE
TheImpactofInternationalOrganizationsandMarketsonEducationalPolicyMaking
PeterStarke
RADICALWELFARESTATERETRENCHMENT
AComparativeAnalysis
JensSteffek,ClaudiaKisslingandPatriziaNanz(editors)
CIVILSOCIETYPARTICIPATIONINEUROPEANANDGLOBALGOVERNANCE
ACurefortheDemocraticDeficit?
HartmutWeßler,BernhardPeters,MichaelBru˝ggemann,KatharinaKleinen-v.Ko˝nigslo˝wand
StrafnieSifft(editors)
TRANSNATIONALIZATIONOFPUBLICSPHERES
HartmutWeßler(editor)
PUBLICDELIBERATIONANDPUBLICCULTURE
TheWritingsofBernhardPeters,1993–2005
JochenZimmerman,JörgR.WernerandPhilippB.Volmer
GLOBALGOVERNANCEINACCOUNTING
RebalancingPublicPowerandPrivateCommitment
TransformationsoftheState
SeriesStandingOrderISBN978–1–4039–8544–6(hardback)
978–1–4039–8545–3(paperback)
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ThisillustrationistakenfromtheoriginaletchinginThomasHobbes’Leviathan
(1651).PalgraveMacmillanandtheeditorsaregratefultoLucilaMuñoz-Sanchez
and Monika Sniegs for their help in redesigning the original to illustrate what
‘transformationsofthestate’mightmean.Theinscriptionatthetopoftheori-
ginal frontispiece reads ‘non est potestas Super Terram quae Comparetur ei’ (Job
41.33): ‘there is no power on earth which can be compared to him’. In the
Bible,thisreferstotheseamonsterLeviathan.(OriginalLeviathanimagereprinted
courtesyoftheBritishLibrary.)
Global Governance in
Accounting
Rebalancing Public Power and Private
Commitment
Jochen Zimmermann, Jörg R. Werner and
Philipp B. Volmer
DepartmentofAccounting,BremenUniversity,Germany
©JochenZimmermann,JörgR.WernerandPhilippB.Volmer2008
Softcover reprint of the hardcover 1st edition 2008 978-0-230-51814-8
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10 9 8 7 6 5 4 3 2 1
17 16 15 14 13 12 11 10 09 08
Contents
ListofExhibits viii
ListofAbbreviations x
Acknowledgements xvi
SeriesEditor’sPreface xvii
PartI TransformationsofStatehoodinAccounting:
TheFramework
1 Accounting:ASocio-economicView 5
1.1 Thelocalizationofaccounting:Businessand
regulatorycontexts 5
1.2 Thepolicyfieldsoffinancialreporting 10
1.3 Thefunctionofaccountingwithinthevarietiesof
capitalism 12
1.4 Governancemodesandtheroleofthestate 17
2 TransformationofRoleModels:Germany,theUK
andtheUS 22
2.1 UKaccounting:Diversity,professionsand‘fair
presentation’ 23
2.2 Germanaccounting:CommercialCode,jurisprudence
andtaxation 26
2.3 USaccounting:Financialmarkets,interstate
commerceanddominanceoftheSEC 29
2.4 Conclusion 32
PartII NewGovernanceArrangementsinDisclosure
3 RiseandFalloftheGolden-AgeNationStateModel 35
3.1 Standard-settingintheUS:NotquiteEurope’s
precursor 35
v
vi Contents
3.2 Standard-settinginEurope:Nationaldevelopments
andearlyEuropeaninterventions 42
3.3 Conclusion 54
4 TheNewAccountingProceduresinEurope:Combining
TransnationalStandard-settingandSupranational
Rule-making 57
4.1 Theemergingframework:TheIAS 58
4.2 TheEuropeanuseoftheframework 61
4.3 Shiftingresponsibilitiesfromthenationstate:
Thelegitimacyissue 64
4.4 Conclusion 68
5 TheStrugglebetweenPrivateandPublic:TheCaseof
StockExchanges 69
5.1 Thebusinessmodelandorganizationalformofstock
exchanges 71
5.2 Germany:Anactiverolefortheprivatesector 73
5.3 TheUK:Theshifttostatecontrol 84
5.4 TheUS:Crowdingouttheprivatesector 90
5.5 Conclusion 97
PartIII TheRoleoftheNationStateinEnforcement
6 DawnandDuskoftheNationStateinAuditing:From
SupervisingPrivateArrangementstoTransnational
Governance 103
6.1 Auditing:Asupplyanddemandanalysis 104
6.2 Auditgovernance:Institutionsand
procedures 108
6.3 Theemergingglobalframework:TheIFAC 116
6.4 Conclusion 117
7 TheStrongholdoftheNationState:Enforcement
Agencies 120
7.1 TheUScase:Acomprehensivepolicingrolefor
theSEC 121
7.2 TheUKcase:Coexistingvariationsofthe
private–publicmix 126
Contents vii
7.3 TheGermancase:Apublic–privatemixwithlow
sanctioningpowers 131
7.4 Financialregulationoflistedfirms:EuropevstheUS 137
7.5 Conclusion 140
PartIV ForcesofTransformationandConvergence:
PotencyandImpotenceoftheNationState
8 TheWeakenedNationState:EconomicGlobalization
andRegimeConvergence 145
8.1 Measuringtheextentofglobalization 146
8.2 Cross-listingsasaphenomenonofglobalization 152
8.3 Influenceofglobalizationonnationallegalsystems 157
8.4 Conclusion 161
9 ThePowerfulNationState:Sarbanes–Oxleyandthe
GlobalReachofRegulation 163
9.1 ThescopeoftheSOA 164
9.2 InstitutionalchangestriggeredintheUS 166
9.3 TheinterferenceofSOAwithextraterritorial
regulation 171
9.4 Pre-SOAdevelopmentsinEuropeancountries 173
9.5 Recentregulatorydevelopments:Functional
convergencetotheUSmodel 177
9.6 Conclusion 183
PartV AnalyticalSummaryandConclusion
10 ConvergencePatternsinPublic–PrivateCollaborations 189
10.1 Regulationinthegoldenage 191
10.2 Today’sregulation 197
10.3 Conclusions 203
Epilogue 207
Notes 209
References 212
Index 229
List of Exhibits
1.1 Localizationofaccounting 9
1.2 Frameworkforanalysingpossibleshiftsinaccounting
governance 20
3.1 OrganizationalstructureofUSfinancialaccounting
standard-setters 41
3.2 EUcompanylawdirectives(includingdraftdirectives) 44
3.3 OrganizationalstructureofUKfinancialaccounting
standard-setters 49
3.4 StructureofGASC/GASBstandard-setting 53
4.1 OrganizationalstructureoftheIASCF 60
5.1 ChangesintheGermanmodel,demonstratedforthe
FSE 79
5.2 DisclosureregulationinGermany(bourse:FSE) 83
5.3 ChangesintheUKmodel,demonstratedfortheLSE 89
5.4 ChangesintheUSmodel,demonstratedfortheAMEX,
NASDAQandNYSE 93
5.5 DifferentphasesofregulationinGermany,theUKand
theUS 99
6.1 Localizationofauditgovernance 118
7.1 OrganizationalstructureoftheSEC 121
7.2 CompetencesofUS-Americanenforcementauthority 124
7.3 RegulatoryframeworkofenforcementintheUS 125
7.4 OrganizationalstructureoftheFSA 128
7.5 CompetencesoftheUKenforcementauthorities 131
7.6 OrganizationalstructureoftheBaFin 133
7.7 CompetencesofGermanenforcementauthorities 135
7.8 RegulatoryframeworkofenforcementintheUK 138
7.9 RegulatoryframeworkofenforcementinGermany 139
8.1 Years’meansforFDIinflowsandoutflows(relativeto
GDP)for24OECDcountries 148
8.2 Increasesinglobalizationin24OECDcountries 149
8.3 StandarddeviationofFDIinflowsandoutflows
(relativetoGDP)for24OECDcountries 150
viii
ListofExhibits ix
8.4 OECDcountriesrankedaccordingtotheaveragelevel
ofglobalization(FDIoutflowsrelativetoGDP)between
1970and2005 151
8.5 TotalforeignportfolioinvestmentsinGermany,the
UKandtheUSbetween1980and2005 151
8.6 MarketcapitalizationscaledbyGDPinGermany,the
UKandtheUS 159
8.7 Numberoflisteddomesticcompaniesperonemillion
inhabitants 159
8.8 TotalvalueofforeignstockstradedinGermany,the
UKandtheUS 160
8.9 Marketcapitalizationrelativetodomesticcredit
providedbythebankingsector 160
9.1 The10-pointprogrammeoftheGermanfederal
government(2003) 181
10.1 Typeofcoordinationandtherespectiveactors 190
10.2 Relevanceofdifferentactorsindisclosureregulationin
thegoldenage 193
10.3 Visualizationofdifferentdisclosureregulationsinthe
goldenage 194
10.4 Differencesindisclosureregulationinthegoldenage 194
10.5 Relevanceofdifferentactorsinenforcementregulation
inthegoldenage 196
10.6 Visualizationofenforcementregulationinthegolden
age 196
10.7 Differencesinenforcementregulationinthegolden
age 197
10.8 Relevanceofdifferentactorsintoday’sdisclosure
regulation 198
10.9 Visualizationoftoday’sdisclosureregulationinthree
countries 199
10.10 Differencesintoday’sdisclosureregulation 199
10.11 Relevanceofdifferentactorsintoday’senforcement
regulation 202
10.12 Visualizationoftoday’senforcementregulationin
threecountries 202
10.13 Differencesintoday’senforcementregulation 202
10.14 Overallcoordinationefforts:Goldenageandtoday 203
10.15 Relativeimportanceofcoordinationbythestate 204
10.16 Shiftsindisclosuregovernance 205
10.17 Shiftsinenforcementgovernance 206