This paper develops a simulation model for a pharmaceutical firm to provide evidence on the tradeoff between objectivity and relevance for several methods of reporting Ramp;D outlays. The findings indicate that a simple capitalization rule, analogous to the successful efforts method of...

We will assess how governance and incentive problems contributed to Enron's rise and fall. A well-functioning capital market creates appropriate linkages of information, incentives, and governance between managers and investors. This process is supposed to be carried out through a network of...

The financial reporting and disclosure problems at Enron, as well as the high market valuations for its stock raise troubling questions about the performance of capital market intermediaries, regulators and governance experts whose are supposed to ensure the effective functioning of the stock...

Corporate disclosure is critical for the functioning of an efficient capital market. Firms provide disclosure through regulated financial reports, including the financial statements, footnotes, management discussion and analysis, and other regulatory filings. In addition, some firms engage in...

This paper examines the usefulness of International Accounting Standards (IAS) in a transitional economy, the People's Republic of China (PRC). Using a sample of firms that provide financial reports under both IAS and more rigid local PRC standards, we conclude that information produced using...

This paper investigates whether a spin-off, equity carve-out, or targeted stock offering results in making the operating performance of a firm's business segments more transparent. Using a sample of 146 spin-offs, equity carve-outs, and targeted stock offerings between 1990-1995, we document...