A new study has found that the Accounting Procedures Act (APA) is changing how foreign firms converge toward U.S. regulations. The study, conducted by researchers at the University of Notre Dame, found that foreign firms are increasingly adopting U.S. accounting practices in order to comply with the APA.

The APA, which was enacted in 1979, requires foreign firms that list their securities on U.S. stock exchanges to file financial statements that comply with U.S. generally accepted accounting principles (GAAP). Prior to the APA, foreign firms were not required to comply with U.S. GAAP, and as a result, there was a great deal of variation in the accounting practices used by foreign firms.

The APA has led to a significant convergence in the accounting practices of foreign firms. In the years since the APA was enacted, foreign firms have increasingly adopted U.S. GAAP in order to comply with the law. This convergence has made it easier for investors to compare the financial statements of foreign firms, and it has also made it easier for U.S. regulators to oversee foreign firms.

The study found that the APA has been particularly effective in changing the accounting practices of foreign firms from developing countries. These firms are more likely to adopt U.S. GAAP than foreign firms from developed countries. This is likely due to the fact that developing countries often have less developed accounting standards than developed countries.

The study also found that the APA has been more effective in changing the accounting practices of foreign firms that are listed on major U.S. stock exchanges. These firms are more likely to adopt U.S. GAAP than foreign firms that are listed on smaller U.S. stock exchanges. This is likely due to the fact that major U.S. stock exchanges have more stringent listing requirements than smaller U.S. stock exchanges.

The study's findings suggest that the APA has been successful in achieving its goal of converging the accounting practices of foreign firms toward U.S. regulations. This convergence has made it easier for investors to compare the financial statements of foreign firms, and it has also made it easier for U.S. regulators to oversee foreign firms.