Timing the Adoption of the New Canadian GAAP for Private Enterprises

Abstract

Prior research into the adoption timing decision of organisations in relation to newly promulgated accounting standards has focused exclusively on public enterprises and used economic cost-benefit frameworks as their main method of analysis. The current study draws on the theories of organisational diffusion of innovation and reasoned action to identify the factors that influence the adoption timing decision of private firms in relation to the new Canadian GAAP for private enterprises, published in 2009. It is shown that knowledge, relative advantages, compatibility, complexity and subjective norms play a significant role in managers’ adoption behaviour, as do sponsorship, managerial tenure and work groups. These results have broad implications for private enterprise managers, financial statement users, standard setters and academics.