The Influence of Regulatory Changes on Corporate Accounting Practices

Abstract

This research investigates the transformative impact of recent regulatory changes
on corporate accounting practices, employing a novel methodological framework that
integrates computational text analysis with network theory to map the diffusion of regulatory influence across organizational structures. Unlike traditional compliance studies that focus on binary adherence metrics, this paper introduces a dynamic systems
approach that conceptualizes regulatory changes as information cascades propagating
through interconnected accounting subsystems. We analyze three major regulatory
shifts implemented between 2020-2024 across 450 multinational corporations, examining not only procedural adaptations but also the cognitive and organizational reconfigurations that emerge in response to regulatory pressure. Our methodology combines
natural language processing of accounting policy documents with agent-based modeling of decision-making processes within accounting departments, revealing previously
undocumented patterns of regulatory absorption and resistance. The findings demonstrate that regulatory influence operates through three distinct channels: direct compliance pathways, indirect network effects through industry associations, and emergent
adaptive behaviors that sometimes subvert regulatory intent. We identify a paradoxical
phenomenon wherein increased regulatory specificity in certain domains (particularly
revenue recognition and environmental disclosures) correlates with decreased uniformity in implementation approaches, suggesting that organizations develop increasingly
sophisticated regulatory arbitrage strategies even as they demonstrate surface-level
compliance. The research contributes to accounting information systems literature
by providing a multi-dimensional framework for understanding regulatory impact that
moves beyond check-box compliance to examine how regulations reshape organizational
cognition, communication patterns, and innovation trajectories within accounting functions. Our computational approach reveals that the most significant transformations
occur not in formal reporting outputs but in the internal decision-support systems
and data governance structures that underpin accounting practices, suggesting that
future regulatory assessments should focus on these infrastructural elements rather than surface-level disclosures.