This article presents a positive theory of accounting standards by examining the factors influencing management's attitudes toward accounting standards, which affect corporate lobbying. The authors identify factors such as taxes, regulation, management compensation, bookkeeping costs, and political costs that influence firms' decisions. These factors are combined into a model predicting that large firms experiencing reduced earnings due to changed accounting standards favor the change, while smaller firms oppose it if the additional bookkeeping costs justify the lobbying costs. The model is tested using corporate submissions to the FASB's Discussion Memorandum on General Price Level Adjustments (GPLA), with empirical results consistent with the theory. The authors argue that management plays a central role in determining accounting standards, as financial reporting is crucial for aligning management with shareholder interests. They examine the effects of accounting standards on management's self-interest, considering factors like taxes, regulation, political costs, and information production costs. The analysis shows that management's utility is positively related to future compensation and negatively related to the dispersion of future compensation. The choice of accounting standards can affect both forms of compensation indirectly through taxes, regulation, political costs, and information production costs, and directly through management compensation plans. The study also explores the incentives of various groups to adjust for changes in accounting standards. It finds that the benefits of adjusting for changes in accounting standards vary depending on the group, with shareholders and nonmanaging directors having more incentive to adjust than politicians and bureaucrats. The analysis predicts that managers have greater incentives to choose accounting standards that report lower earnings due to tax, political, and regulatory considerations. However, this prediction is conditional on the firm being regulated or subject to political pressure. The article concludes that larger firms are more likely to support or oppose accounting standards based on their impact on earnings, while smaller firms may not submit or oppose changes. The empirical tests confirm the relationship between firm size and management attitudes on accounting standards, with political costs and tax effects influencing management's attitudes. The discriminant analysis supports these findings, showing that firm size is the most important variable in determining management's position on accounting standards.This article presents a positive theory of accounting standards by examining the factors influencing management's attitudes toward accounting standards, which affect corporate lobbying. The authors identify factors such as taxes, regulation, management compensation, bookkeeping costs, and political costs that influence firms' decisions. These factors are combined into a model predicting that large firms experiencing reduced earnings due to changed accounting standards favor the change, while smaller firms oppose it if the additional bookkeeping costs justify the lobbying costs. The model is tested using corporate submissions to the FASB's Discussion Memorandum on General Price Level Adjustments (GPLA), with empirical results consistent with the theory. The authors argue that management plays a central role in determining accounting standards, as financial reporting is crucial for aligning management with shareholder interests. They examine the effects of accounting standards on management's self-interest, considering factors like taxes, regulation, political costs, and information production costs. The analysis shows that management's utility is positively related to future compensation and negatively related to the dispersion of future compensation. The choice of accounting standards can affect both forms of compensation indirectly through taxes, regulation, political costs, and information production costs, and directly through management compensation plans. The study also explores the incentives of various groups to adjust for changes in accounting standards. It finds that the benefits of adjusting for changes in accounting standards vary depending on the group, with shareholders and nonmanaging directors having more incentive to adjust than politicians and bureaucrats. The analysis predicts that managers have greater incentives to choose accounting standards that report lower earnings due to tax, political, and regulatory considerations. However, this prediction is conditional on the firm being regulated or subject to political pressure. The article concludes that larger firms are more likely to support or oppose accounting standards based on their impact on earnings, while smaller firms may not submit or oppose changes. The empirical tests confirm the relationship between firm size and management attitudes on accounting standards, with political costs and tax effects influencing management's attitudes. The discriminant analysis supports these findings, showing that firm size is the most important variable in determining management's position on accounting standards.