Trust is an essential ingredient in facilitating financial transactions. The financial reporting process helps to create trust, but it, in turn, has to be trusted. Auditing and professional standards have been the traditional means by which trust in financial reporting has been fostered....

In this study we compare the timeliness and conservatism of reported earnings across the U.S. and U.K. GAAP regimes. We present a theoretical model of the differential speeds of recognition of good news and bad news. This suggests informative and relatively robust ways of measuring dimensions of...

We examine the accrual choices of outsourcing firms with links to US congressional candidates during the 2004 elections, when corporate outsourcing was a major campaign issue. We find that politically-connected firms with more extensive outsourcing activities have more income-decreasing...

Several scholars have proposed using property owners' periodic assessments of properties' economic value as takings compensation, replacing the current U.S. regime which uses ex post, ad hoc governmental assessments of properties' market value. No empirical study has yet been done to examine...

This paper investigates the effect of different mood states - specifically positive, neutral, and negative mood - on inventory valuation decisions. Psychological research suggests that different mood states can lead to different professional judgments in the performance of an ambiguous task....

I study the evolution of SFAS 142, which uses unverifiable fair-value estimates to account for acquired goodwill. I find evidence consistent with the FASB issuing SFAS 142 in response to political pressure over its proposal to abolish pooling accounting. The result is interesting given this...

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...

This study uses a comprehensive panel of tax returns to examine the financial reporting choices of medium-to-large private U.S. firms, a setting which controls over $9 trillion in capital, vastly out-numbers public U.S. firms across all industries, yet has no financial reporting mandates. We...

We examine the combined value relevance of book value of equity and net income before and after the mandatory transition to IFRS in Greece. Contrary to our expectations, we find no significant change in the explanatory power of value relevance regressions between the two periods. The...

The dramatic increase in the number of restatements filed over the past years has been attributed to numerous causes, including the complexity of the accounting standards, internal control reviews, changes in materiality thresholds, the overly conservative nature of auditors, earnings...