Auditors’ legal liability incentives to be conservative cause fourth quarter earnings to differ systematically from interim quarter earnings. We show that the frequencies and average magnitudes of losses, negative extraordinary items, negative special items and negative discontinued operations...

The 1992 National Energy Policy Act (NEPA) intensified competition in the electric utility industry by allowing nonutility generators to produce and sell power in wholesale energy markets. Congress expected NEPA to lead to improved operating efficiencies by substituting market forces for...