In 2019, the Public Company Accounting Oversight Board (PCAOB) expanded audit reports by requiring auditors to provide a critical audit matters (CAM) disclosure in the independent audit report, based on Auditing Standards (AS) 3101, The Auditor’s Report on an Audit of Financial Statements When...

In early 2006, the AICPA released Alerts #90 and #98 which, following Securities and Exchange Commission guidance, allowed firms to reclassify cash flow items without penalty. We investigate the market effects of the cash flow restatements by investigating the abnormal trading volume reaction to...

This study examines how deferred revenue influences the cost of debt. Using credit spreads as a proxy for the cost of debt, we find that deferred revenue increases the cost of debt. However, when we consider the impact that an increase in deferred revenue has on the debt-to-asset ratio, we find...

The Securities and Exchange Commission has become increasingly concerned with the rising number of restatements to statements of cash flows (SCFs). Regulators and practitioners are generally more focused on the overstatement of operating cash flows, while the understatement of operating cash...

The FASB, PCAOB, SEC, and AICPA have all acknowledged that the accounting field needs to revisit the statement of cash flows (SCF). While the overall number of restatements has held steady over the past five years, the percentage of cash flow restatements (CFRs) has risen from 8.7% of all...

Under SFAS No. 131, a company is required to provide a reconciliation of the total of the reportable segments' profit or loss to the firm's consolidated income. This paper investigates these segment disclosures and related determinants of managers' segment financial reporting choices. We focus...

This study investigates whether accrual quality, earnings persistence and earnings predictive ability are affected by the adequacy rather than the strength of corporate governance. Under the premise that firms that have consistently outperformed their industry counterparts in the past have less...