This paper reports descriptive evidence about how managers attempt to manage earnings, based on a sample of 515 earnings-management attempts obtained from a survey of 253 experienced auditors (and also analyzed by Nelson et al. 2002). We classify attempts first according to primary approach:...

I study the evolution of Statement of Financial Accounting Standard (SFAS) # 142, which uses unverifiable fair-value estimates to account for acquired goodwill. I find evidence consistent with the Financial Accounting Standards Board (FASB) issuing SFAS 142 in response to political pressure over...

I use market-based measures to investigate the perceived reliability of fair value amounts reported in bank financial statements. Fair values as a measurement basis in accounting are becoming more predominant. This growth increasingly requires fair value estimation. I develop a hypothesis based...

We measure the power of some simple financial statement analysis techniques for identifying instances of significant earnings overstatements, and then contrast the results with those from several measures of unexpected accruals. Our results suggest that relative to a group of matched control...

This paper is Part II in a two part series on conservatism in accounting. Part I examines alternative explanations for conservatism in accounting and their implications for accounting regulators (SEC and FASB). Part II summarizes the empirical evidence on the existence of conservatism,...

We examine how a firm's decision to capitalize vs expense Ramp;D costs affects how the firm manages earnings with Ramp;D. We find that expensers engage in real earnings management, cutting Ramp;D expenditures to meet earnings benchmarks. Capitalizers, however, cut Ramp;D expense to meet...

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...

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...