The Financial Accounting Standards Board (FASB) recently issued Statement No. 156 - Accounting for Servicing of Financial Assets, an amendment of FASB Statement No. 140 (SFAS 156) which requires, if servicing assets and liabilities are separately recognized, their initial measurement at fair...

We examine Enron's collapse to provide insights as to the efficacy of recent governance reforms. In doing so, we explore two main issues. First, if recently mandated governance changes had been in place earlier, would they have constrained actions by Enron's management? Second, and more...

We investigate whether auditor independence is compromised by either the mix of audit and non audit services (NAS), or simply unusually large NAS or audit fees. The results help reconcile apparently conflicting evidence in prior studies linking NAS and indicators of earnings management, as well...

Prior studies on the incremental predictive ability of accrual models over cash flow models with respect to future cash flows have led to conflicting results. This paper presents an accrual-based cash flow prediction model based on a random walk in cash flows adjusted for the reversal of current...

Internal documents released through the Enron litigation allow for a more detailed examination of the activities of top executives than is typically possible. This clinical study of Enron's Ken Lay highlights the difference between popular opinion on the role and knowledge of CEOs with that...

This study examines firms accelerating the vesting of stock options prior to FAS 123(R) becoming effective. A central tenet of this research is that the firms electing to accelerate do so to take advantage of the opportunity to get option expenses written off in a one-time footnote disclosure....

The synthetic lease is a hybrid financing structure that allows a company to obtain many of the benefits of asset ownership, including capital lease treatment for tax purposes, while treating lease payments as operating expenses on the firm's income statement. Proponents of these off balance...

This study seeks to ascertain the impact of employee stock ownership plans (ESOPs) on earnings management. The empirical evidence shows that firms with larger ESOP ownership exhibit a lower degree of earnings management. I suggest that this is the case because ESOPs motivate employees to monitor...

We provide evidence suggesting that both the post-repurchase long-term abnormal returns and the reported improvement in operating performance documented in prior studies are driven, at least partly, by pre-repurchase downward earnings management, rather than genuine growth in profitability. The...

Not all claims are reported when a financial operational risk data base is created. The probability of reporting increase with the size of the operational risk loss and approaches one for very big losses. Operational risk losses comes from many different sources and can be expected to follow a...