We consider accounting from an evolutionary perspective. Accounting encompasses the creation of transactional records, the summarization of records in t-accounts, and the preparation of audited financial statements. Accounting's history spans at least 10,000 years dating back to the first human...

This essay is based on a keynote speech at the 2014 Journal of International Accounting Research (JIAR) Conference. That talk was built upon a 2009 American Accounting Association (AAA) annual meeting panel presentation titled “Is there any scientific legitimacy to what we teach in Accounting...

Taiwan is an economy with an efficient stock market where accounting and auditing standards generally follow the US. However, a culturally different climate is caused by the predominance of family-owned public companies. We find Taiwanese firms' earnings exhibit the conservatism and timeliness...

Auditors' incentives to be conservative are likely to vary both cross-sectionally and over time based on their legal liability exposure. We predict that Big Eight (Six/Five) auditors are likely to be more conservative than non-Big Eight Auditors. We show that the earnings reported by Big Eight...

Sales decreases affect earnings more than sales increases because of cost stickiness. We hypothesize that this correlated omitted variable constitutes a confounding effect in standard asymmetric timeliness models. Adding sales change direction to the Basu (1997) and Ball et al. (2013b) models...

This study investigates (a) why some IPO firms proactively disclose internal control weaknesses (ICWs) and remediation progress in their prospectuses before going public, despite being exempt from the requirements of Sections 302 and 404 of the Sarbanes-Oxley Act at the time of IPO, and (b) the...

We study non-officer directors' influence on the accounting conservatism of U.S. public firms. Between 1986 and 2002, all 50 U.S. states enacted laws that limited non-officer directors' litigation risk without changing officer directors' litigation risk. We find that conditional conservatism...

Open conference calls reveal important information because of their forward-looking discussion, interactive nature, and easy accessibility. Using Bloomberg data, we investigate why firms hold earnings conference calls at different times of the day and how the stock market interprets and reacts...

Double-entry bookkeeping (DEB) is used by most large firms even though scholars do not understand why they chose DEB. We address three questions about DEB’s gradual displacement of single-entry bookkeeping (SEB): (1) What is the main benefit of DEB? (2) How did DEB emerge and evolve? and (3)...

We critically evaluate Sprouse's 1966 Journal of Accountancy article, which prodded the FASB towards a balance-sheet approach. We highlight three errors in this article. First, Sprouse confuses necessary and sufficient conditions by arguing that good accounting systems must satisfy the...