This paper proposes a valuation method that addresses the impact of deferred tax balances on a firm's economic profitability and relies on readily-accessible and easily- understood current accounting data, rather than imperfect estimates of future cash flows. This method values a firm's future...

This paper models the demand by auditors for bright-line financial reporting standards, and compares auditors' preferences for bright-line standards with managers' and regulators' preferences. Bright-line standards are unambiguous, requiring no judgment in their application. Standards that are...

This paper clarifies some of the conflicting arguments about the value relevance of deferred taxes. We address two questions. First, does accounting aggregation hold, or in other words, are deferred tax expense and liability balances valued the same as operating earnings and asset balances,...

Some companies now outsource their internal audit function to public accountants. Internal auditors and accounting firms disagree about the merits of outsourcing. Each type of auditor claims to provide more cost-effective services and appears to claim superior expertise. This paper uses agency...

We provide evidence regarding the incremental value- relevance of deferred tax information provided under SFAS No. 109. We assess the likelihood of reversal for each component of the deferred tax disclosures required by SFAS No. 109, forming expectations about the direction and magnitude of...

Using the Financial Statement Balancing Model (FSBM) from Compustat, we examine whether financial statement data articulate for 10,681 U.S. non-financial firms for 24 years, a total of 92,951 firm years. We accomplish three specific research goals. First, we build the first formal model of...

This paper examines the relation between audit fees and accruals from a balance sheet auditing perspective. We argue that the underlying economic characteristics of various transactions, as reflected in the articulation-based accruals in Casey et al. (2017), are predictably associated with audit...

We build an articulating financial statements model in which the beginning and ending balance sheet amounts are explicitly linked to accruals. We distinguish accruals based on the source financial statement of the accruals, either the cash flow statement, balance sheet, or statement of owners'...

Starting in 1997, the U.S. Securities and Exchange Commission required that some firms disclose information about risks. One format for risk disclosures let firms disclose correlations by allowing firms to report the sensitivity to market risk factors of cash flows related only to financial...