Title

GAAP as a symbol of legitimacy: New York State's decision to adopt generally accepted accounting principles

Publication Date

1-1-1992

Abstract

In this paper, we draw on economic and sociological theories in order to explain public sector incentives to adopt generally accepted accounting principles (GAAP), using the state of New York's decision to adopt GAAP for external financial reporting. We argue that the state's decision to adopt GAAP was an attempt to regain legitimacy for the state's financial management practices. Institutional interests demanding New York use GAAP were part of the sociological phenomenon called institutional isomorphism. Power relations and organizational politics related to the state's budgetary process also significantly influenced the state's decision to adopt GAAP. However, although professional élites made strong statements that GAAP adoption would improve the state's financial management practices, we found no compelling evidence that producing GAAP financial information has significantly altered the state's financial management practices. © 1992.

Publication Title

Accounting, Organizations and Society

Volume

17

Issue

7

First Page

613

Last Page

643

DOI

10.1016/0361-3682(92)90016-L

Source Full-text URL

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1181942

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