Revenues and expenses are fundamentally proportional to one another, but are likely to be disproportionally affected by transitory items or economic shocks. We build on this observation and propose a new measure of sustainable earnings based on deviations from normal profit margins. While some...

When two value estimates are about equally likely, conservatism dictates reporting the less optimistic one (e.g. Lower of Cost or Market). We use an analytical model to investigate informational implications of this dictum, and identify types of environments where the conservative accounting...

This study investigates the relationship between family ownership and material weaknesses in internal controls over financial reporting. Recent Sarbanes-Oxley (SOX) regulation and mandatory disclosure of family relations among block shareholders and directors in Israel offer an ultimate setting...