This study develops and calibrates a revenue accruals model. Changes in accounts receivable and deferred revenues are modeled using the respective income statement and cash flow numbers (i.e., revenues and cash flows from sales) that relate directly to the accruals' origination and reversal....

This study models a manager who privately reports earnings to an independent audit committee that, after its own due diligence, modifies the report for public release to investors. The audit committee alters the reporting and valuation dynamics by attempting to remove the manager's reporting...

This study investigates whether having a Sarbanes-Oxley Section 404 [SOX 404] material weakness allows managers of these firms to manipulate earnings to a greater extent using discretionary accruals than managers of firms with no SOX 404 material weaknesses. The study focuses on a sample of 218...

The Private Securities Litigation Reform Act (PSLRA) increases restrictions on private litigation for securities fraud. We examine stock price reactions on legislative-event-related days of firms in four high-litigation-risk industries. Two other studies on this issue, Spiess and Tkac (1997)...

This paper examines whether the likelihood of accounting restatements is associated with the Big 4 industry auditor specialists, measured at both the partnerndash;level and audit firm-level leadership. We focus on a sample of listed firms in Taiwan where audit reports must be audited and signed...

Falsifying Financial Statements involves the manipulation of financial accounts by overstating assets, sales and profit, or understating liabilities, expenses, or losses. This paper explores the effectiveness of an innovative classification methodology in detecting firms that issue falsified...

The Sarbanes-Oxley Act of 2002 conferred upon the Securities and Exchange Commission (“SEC”) the authority to recognize as “‘generally accepted' for purposes of the securities laws, any accounting principles established by a standard setting body” provided that the standard setting...

Protecting the public interest is at the core of federal securities laws. To protect the public interest is the mission of the Securities and Exchange Commission and its raison d'être. At least, that is what the public is encouraged to believe.Protecting the public interest in Federal...

We provide evidence of the impact of Auditing Standard No. 2 (“AS 2”), issued pursuant to the Sarbanes-Oxley Act of 2002 (“SarBox”), on the outcome of auditors in financial reporting litigation. Specifically, we focus on the existence of financial restatements and how and why they...

This paper investigates a particular scenario under the Brazilian Generally Accepted Accounting Principles before IFRS adoption, which require public companies to disclose individual financial statements (legal parent entity), together with consolidated financial statements (economic entity)....