ABSTRACT
The political cost is one of the most important costs and payment of companies, and companies sought to reduce these costs. This chapter aims to study the relationship between the size of the company and the political costs. According to political costs theory by R. Watts and Jerold. L. Zimmerman, politicians have the authority to use the politics of the distribution of wealth again and with mechanisms like taxes, helps, contributions, and insurance. The companies' tax is one part of the political costs. Watts and Zimmerman presented three main hypotheses to select the group of accounting standards that report low income: gratuity plan hypothesis, Liability to stockholder's equity hypothesis, and Size hypothesis. The considerable point is the large part of country's political costs such as tax, insurance, urban toll, education toll are inescapable from companies.
