Regulators such as the SEC and standard setting bodies such as the FASB and the IASB argue the case for the conceptual desirability of fair value measurement, notably on the relevance dimension. Recent standards on financial instruments and certain non-financial items adopt the new measurement...

Conservatism is one of the attributes of accounting quality. Conservatism is also one of the major reasons for international differences in financial reporting. The objective of this paper is to examine earnings quality proxied by earnings conservatism in transitional economies of Central and...

Financial accounting standards in the U.S. are developed by private standard setting organizations (SSOs) that operate under the oversight of a government agency. The primary accounting SSO (FASB) has been criticized for writing too many standards (standards overload), the complexity of its...

This paper studies how an accountant's method of aggregating information in a financial report is affected by differences in the reliability and relevance of components of the report. We study a firm that hires an accountant to produce a report that reveals information to investors regarding the...

We examine the information role of accounting disclosures on warranties, utilizing a database that became available due to the requirements of FIN 45. First, because firms use warranty policies as a business strategy to promote their products, a warranty reserve can serve two roles: an...

This paper examines the extent to which management makes accounting choices to record intangible assets based on their insights into the underlying economics of their firm. It exploits a setting in which management have accounting discretion to record a wide range of intangible assets. The...

Khan and Watts (2009) develop a firm-year measure of conditional conservatism, labeled C_Score, that builds on the Basu (1997) asymmetric timeliness (AT) measure. However, recent research documents an asymmetric relation between lagged earnings and current returns, indicative of bias in the Basu...

We study clauses in private lending agreements requiring auditors to assure lenders of borrowers' compliance with financial covenants. Auditors are required under general purpose financial reporting to review covenant compliance. However, by informing lenders directly that they have no knowledge...

The properties of many important valuation rules can be quantified, examined, and compared in a unified framework to assist policy decisions. Valuation rules can be viewed as econometric estimators of unobserved values of aggregates. Which valuation rule has minimum mean squared error (relative...

We suggest a full consolidation approach that takes into account the property rights structure within the subsidiaries, in particular, the majority requirements on restructurings. Our approach employs a property rights index based on cooperative game theory