Intangibles are ideas or knowledge about the natural (physical and biological) and socio-cultural worlds that enable people to better accomplish their goals, both in primitive societies and in modern economies. Intangibles include basic research and technology improvements as well as knowledge...

Adam Smith hypothesized that impersonal exchange was necessary for a society to develop specialized division of labor and create wealth. Douglass North and Vernon Smith argue that successful developed economies are the result of institutions. We hypothesize and provide evidence from ethnographic...

Prior research concludes that financial analysts do not process public information efficiently in generating their earnings forecasts. The OLS regression-based tests used in prior studies assume implicitly that analysts face a quadratic loss function, or that analysts minimize their squared...

We study nonofficer directors' influence on the accounting conservatism of U.S. public firms. Between 1986 and 2002, all 50 U.S. states enacted laws that limited nonofficer directors' litigation risk but often left officer directors' litigation risk unchanged. We find that conditional...

We study the influence of bank competition on U.S. public borrowers' accounting conservatism by exploiting the staggered adoption of the Riegle-Neal Interstate Banking and Branching Efficiency Act (IBBEA) of 1994, which increased the threat of new bank entrants and competition. We find that...

Braun (this issue) argues that the traditional accounting principles underlying the revenue-expense approach such as Historical Cost and Conservatism are ecologically rational in that they help organizations survive better in uncertain economic environments. More importantly, he argues that the...

Large net loan charge-offs are frequently associated with large decreases in nonperforming loans and large increases in loan loss provisions, inducing a V-shaped relation between loan loss provisions and nonperforming loan changes. Failure to model the asymmetry attributable to net loan...

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 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...

Conditional conservatism is an integral but often unmodeled part of the normal accrual process. The standard economic determinants of accruals contain information about unrealized losses. We argue that accountants recognize these unrealized losses as disaggregated write-downs for small asset...