Discussion of International Differences in the Timeliness, Conservatism, and Classification of Earnings

Pope and Walker examine differences in the timeliness and conservatism of U.S. and U.K. reported earnings. They conclude that the U.S. accounting regime appears significantly more conservative than the U.K. regime, when comparing earnings before extraordinary items. However, when comparing bottom-line earnings, they find the opposite. The paper contributes to research on international differences in accounting, and their causes and consequences.The conference discussion focused on accounting differences between the U.K. and the U.S., the assumptions underlying the analyses in the paper, and the interpretation of the results. I discuss the authors' research design choices, examining in turn, the motivation, research agenda, and specification issues