Research in Accounting Regulation最新文献

We examine the stock market reaction to the SEC announcement to permanently exempt non-accelerated filers from compliance with Section 404(b) of the Sarbanes–Oxley Act. Mandatory compliance with auditor attestation under Section 404(b) is highly controversial. Using a sample of non-accelerated issuers for 2006–2011, we find a negative market reaction to the November 4, 2009 exemption announcement. However, most of the negative returns accrue to non-accelerated filers that do not voluntarily comply with Section 404(b), suggesting that auditor attestation enhances firm value. The use of a Big 4 auditor, strong analyst following, and superior internal controls over financial reporting (ICFR) are associated with positive/less negative market responses. Voluntary compliers with Section 404(b) are more likely to have a Big 4 auditor, stronger analyst coverage, effective ICFR, stronger firm performance and lower information asymmetry. Our results are consistent with firms using voluntary compliance with SOX 404(b) as a signal of superior operating performance and ICFR quality to overcome information asymmetry and therefore mitigate the negative valuation impact of the permanent exemption from auditor attestation.

The Financial Accounting Standards Board recently issued Accounting Standards Update 2015–17, which will require firms to classify all deferred tax assets and liabilities as noncurrent in classified balance sheets instead of separating them into current and noncurrent amounts. This change is designed to simplify the reporting of deferred taxes and align with International Financial Reporting Standards. This study conducts empirical analyses on a broad cross-section of publicly traded U.S. firms in order to examine the stock market's valuation of current and noncurrent deferred tax assets and liabilities. The results suggest that classifying all deferred taxes as noncurrent may adversely affect the usefulness of financial statements for equity investors.

Using S&P 500 entities, this study examines presentation formats of “Other Comprehensive Income” after ASU 2011-05. This study finds that 92 percent of entities presented in two separate but consecutive statements after ASU 2011-05 and 94 percent of the entities that presented in a statement of changes in shareholders' equity before ASU 2011-05 switched to two separate but consecutive statements after ASU 2011-05. This reflects the practitioners' view that presenting net income and other comprehensive income together in a single continuous statement may create confusion among financial statement users, but is inconsistent with the FASB's initial position that only allowed a single continuous statement. Thus, pros and cons of both formats should be further evaluated by standard-setters so that a more useful presentation format can be adopted by more entities. This study also documents that presentation formats do not seem to be associated with the specific industries and the propensity to report negative other comprehensive income after ASU 2011-05.

Transfer of asset control is a central principle in the revenue recognition standard jointly developed and issued by the FASB and IASB (Boards) in 2014. Guidance with respect to this principle will be very important in applying the new standard. This study examines the effect of type and amount of guidance on the judgment of whether control has been transferred. Study participants receive different hypothetical standards and provide judgments with respect to the transfer of control in a construction-type contract case setting. Results indicate that adding guidance to the basic principle in the form of either key indicators or an illustrative example results in participants being more likely to judge the customer as having control during the construction period. Participants perceive indicators as being more useful than examples in forming their judgments. The nature of the example (affirmative or counter) does not have a differential impact on judgments when added to a principle-only standard. On the other hand, when an example is added to a standard that contains a principle and key indicators, judgments are significantly different when a counter example is present than when an affirmative example is part of the standard. This study provides the Boards with research results that may be useful in determining the type and amount of guidance to be provided in a principle-based standard.

In this paper, we synthesize in annotated bibliography form, recent regulation-related findings and commentaries in the academic literature. This annotated bibliography is one in a series of bibliographies that summarizes regulation-related academic research. We reviewed articles published in The Accounting Review, Journal of Accounting Research, Journal of Accounting and Economics, Contemporary Accounting Research, Accounting Horizons, The Journal of Accounting, Auditing & Finance, Journal of Accounting and Public Policy, Journal of Business, Finance & Accounting, Auditing: A Journal of Practice and Theory, and Research in Accounting Regulation. We annotate results of regulation-related research studies and key points from regulation-related commentaries. The literature featured some strong regulation-related threads in 2015 including the foundations of financial accounting and reporting, international financial reporting standards, Sarbanes–Oxley and the Public Company Accounting Oversight Board.

Goodwill in the accounting context represents amounts paid in excess of the fair value of the identifiable net assets for a business acquisition. The accounting for goodwill has long been a subject of debate and remains so today. Indeed, the guidance for goodwill accounting has been significantly revised by regulators twice since 2001 (2001 and 2011). Despite these recent and significant revisions, the topic is back on the Financial Accounting Standards Board (FASB) agenda as the FASB added a project to once again discuss the optimal treatment for goodwill (Financial Accounting Standards Board, 2015). In this paper, we seek to inform this effort by describing the evolution of accounting standards for goodwill and then synthesizing and analyzing the academic literature on goodwill accounting and reporting. Based on this historical perspective and analysis of the literature, we then assess the strengths and weaknesses of different accounting approaches for goodwill, highlight the factors affecting the process of standard-setting on goodwill, and make recommendations. Our recommendations include recommendations for the FASB about optimal guidance and recommendations for academics concerning future academic research projects that would advance the goodwill accounting debate. Hence, this paper should be of interest to regulators and standard setters, academic researchers interested in mergers and acquisitions and goodwill, and financial statement preparers and users.