Voluntary changes in accounting principle represent explicit and fundamental decisions by managers to exercise accounting discretion. This paper develops an organizing framework to review prior literature on voluntary changes, provides descriptive insights on contemporary changes, and identifies...

The purpose of this paper is to investigate the joint effects of accounting guidance type (principles-based versus rules-based) and legal liability regime (unlimited versus limited) on auditor decisions. Both the Securities and Exchange Commission (SEC) and the Financial Accounting Standards...