In this paper we focus on the conflict of interests among shareholders as a possible determinant of earnings management. Using a sample of 3,559 listed firms from the United States, Canada, the United Kingdom, France, Spain, and Italy between 2008 and 2013, we analyse how the distribution of...

The capitalization of research and development (Ramp;D) costs is a controversial accounting issue because of the contention that such capitalization is motivated by incentives to manipulate earnings. Based on a sample of Italian listed companies, this paper examines whether companies' decisions...

This study analyzes determinants and effects of differences between Domestic Accounting Standards (DAS) and International Accounting Standards (IAS). We use an extensive list of differences between DAS and IAS to create two indices, absence and divergence. Absence measures the extent to which...

This paper provides evidence that keiretsu group member firms are subject to lower effective tax rates than independent firms in Japan. As one explanation for this phenomenon, we develop a hypothesis that keiretsu firms strategically shift financially reported income among affiliates in order to...

Corporate governance literature advances the idea that certain aspects of board of directors' structure improve monitoring of managerial decisions. Among these is the managers' decision to manage earnings. Prior studies have shown that earnings management, in widely-held public companies, is...

We draw on the investor protection literature to identify structural factors in the financial reporting environment that are likely to explain cross-country differences in the information content of annual earnings announcements. Using data from over 50,000 annual earnings announcements in 26...

We investigate corporate transparency, defined as the availability of firm-specific information to those outside publicly traded firms. We conceptualize corporate transparency within a country as output from a multi-faceted system whose components collectively produce, gather, validate and...

This study examines whether the mandatory adoption of International Financial Reporting Standards (IFRS) in the European Union (EU) in 2005 reduces the cost of equity capital. Using a sample of 6,456 firm-year observations of 1,084 EU firms during the 1995 to 2006 period, I find evidence that,...

This paper examines international differences in firms' cost of equity capital across 40 countries. We analyze whether the effectiveness of a country's legal institutions and securities regulation is systematically related to cross-country differences in the cost of equity capital. We employ...

Kim and Shi (this issue) document that voluntary IFRS adoption is associated with significant benefits and argue that the effect is causal – a conclusion that is similar to many published papers on IFRS adoption. Yet voluntary IFRS adopters constitute only a small percentage of the global...