For the period of 2006 to 2008, we collect Comment Letters issued by the SEC that question the application of US GAAP by US firms or the application of IFRS by European firms registered with the SEC. We investigate whether institutional investors react to the letters by changing their holdings...

This study analyzes the ‘real' effects of accounting standards in the context of defined benefit pension plans. Specifically, we examine IAS 19R, which increases expected pension-induced equity volatility by eliminating the so-called ‘corridor method', a smoothing device for actuarial gains...

We examine the response of individual investors to firms' adoptions of SFAS 109–Accounting for Income Taxes. We predict SFAS 109 (as compared to APB 11) provides new decision-useful information, reducing the information disadvantage of individual investors relative to more sophisticated...

We investigate the design of optimal share-based incentive contracts by formulating a stochastic differential game between a listed company and a representative manager. The value maximizing company can grant share-based payments to the manager as incentive component of the total salary package...

Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangibles (FASB 2001) altered the treatment of goodwill by replacing the systematic amortization of goodwill with impairment testing. This change affected earnings in two ways by requiring many firms to take sizable...

This paper examines whether public bank managers change both the composition and classification of their investment portfolios after SFAS 157. We first show that non-agency mortgage-backed securities (MBSNA) are the asset class most likely to be measured using level 3 inputs, which are based on...

This study examines how the winsorization procedure affects the performance of regression-based earnings forecasting models. I find that the impact is multifaceted and depends principally on three factors: the level of data errors in the tails, the characteristics of firms affected by the...