Auditors' incentives to be conservative are likely to vary both cross-sectionally and over time based on their legal liability exposure. We predict that Big Eight (Six/Five) auditors are likely to be more conservative than non-Big Eight Auditors. We show that the earnings reported by Big Eight...

An examination of analysts' accuracy in predicting annual earnings for firms reporting losses and firms reporting profits finds that analysts are ten times more accurate in predicting the earnings of profit firms. They have also improved their predictive ability for profit firms since the...

Pope and Walker examine differences in the timeliness and conservatism of U.S. and U.K. reported earnings. They conclude that the U.S. accounting regime appears significantly more conservative than the U.K. regime, when comparing earnings before extraordinary items. However, when comparing...

Sivakumar and Waymire examine differences in the properties of US railroads' reported earnings before and after concurrent changes in accounting rules and rate regulations. Although the accounting rules were intended to combat income smoothing, Sivakumar and Waymire find little evidence that...

Chambers, Freeman and Koch test to see whether earnings response coefficients (ERCs), or stock returns per unit of unexpected earnings, are increasing in total risk. They generate this prediction from a model in which the sensitivity of dividend expectations to earnings news increases in total...

Giner & Rees (2001) report that the asymmetry in the timeliness of earnings decreases as one moves across the U. K., France and Germany. These results are similar to those previously predicted and reported by Ball, Kothari & Robin (2000). The authors extend this prior research by examining the...

Hirshleifer et al. (J. Account. Econom. 38 (2004)) and Taffler, Lu and Kausar (J. Account. Econom. 38 (2004)) document large and statistically significant abnormal returns from trading on balance sheet data and audit opinions. However, the statistical tests ignore high transactions costs,...

Carroll, Linsmeier, and Petroni examine whether fair value financial statements reported by closed-end mutual funds are reliable and relevant. They also examine whether their inferences are sensitive to fund type, where they classify funds into six categories by their majority investment type....

Accountants examine multiple indicators when assessing whether individual assets are impaired. Different indicators predict cash flows over varying time horizons, and their importance varies with how far into the future individual assets are expected to generate cash flows. We predict that...

We analyze p-values in empirical papers published in the “top three” accounting journals in 2011. We estimate average Type I error and Type II error rates to be 11% and 22% respectively. The p-value distribution is strongly concentrated near zero and the frequencies of p-values just below...