We examine how Big N auditors' changing incentives impact their comment-letter lobbying on U.S. GAAP over the first thirty-four years of the FASB (1973-2006). In particular, we focus on the influence of auditors' lobbying incentives arising from two basic factors: managing expected litigation...

Residual income valuation is based on the assumption that the clean surplus relation holds. As pointed out by Ohlson (2000), among others, the standard clean surplus relation is frequently violated. Moreover, standard residual income valuation models rest on the implicit assumption that future...

The SEC decided in 2007 to allow foreign private issuers who use IFRS as promulgated by the IASB (pure IFRS filers, hereafter) to stop providing reconciliations to US GAAP. Some opposed the measure because the limited academic literature available at the time indicated that the reconciliation is...

Regulations that limit dividend payouts, made by limited liability companies in order to safeguard the interests of creditors, represent important legal constraints as they ensure a minimum level of protection. Hereby, this task, which is performed in Germany by annual financial statements...

This paper investigates contractual definitions of net income and net worth and the cross-sectional variation in definitions of net income in a large sample of private debt contracts to shed light on the debt contracting demand for accounting numbers. The descriptive evidence indicates that...

Numerous empirical studies reveal that accounting numbers – equity as well as earnings' measures - have lost value relevance, i.e. explanatory power for stock market capitalization and/or abnormal returns, during the last decades. This effect is of particular significance after the rise of the...