This study investigates whether the provision of non-audit services (NAS) is associated with accounting quality and whether political connection moderates the relationship between the NAS and accounting quality. The sample includes 2,245 firm-year observations from Malaysia during the period...

I argue that external financial reporting quality has at best a 2nd order effect on firm value of U.S. publicly traded companies and that attempts to improve a firm's external reporting quality has a 3rd order effect on these firms' value. Recognizing that external financial reporting quality is...

This study investigates whether language difference affects the readability scores of accounting narratives derived from earnings management practices in 226 companies in the UK, Spain, and Jordan from 2017 to 2021.Our analytical method applies three of the most significant readability measures...

This study examines the existence of earnings management by travel agencies operating in Poland at the time of global disease threats over the last decade. To measure earnings management the estimation of total discretionary accruals was used constituting some changes in the working capital....

One of the goals of the Sarbanes-Oxley Act (hereafter SOX) was to restore confidence in financial reporting by providing incentive for firms to report financial results that reflect the underlying economic performance. Early findings are inconclusive on the success of the Act. Cohen, Dey and Lys...

I address the interaction between accounting conservatism and real options in both a staged investment and abandonment model. An accounting policy biased towards classifying a Good (Bad) project as Bad (Good) is conservative (aggressive). The accounting signal is optimally conservative when the...

This paper presents a model showing that accounting conservatism affects creditor coordination when the borrowing firm is in financial distress. There are two effects. First, accounting conservatism tends to reduce dividend payments and to keep assets within the firm (dividend restriction...

In this paper, I present evidence that the asymmetry in cash flows biases standard measures of conditional conservatism. First, the magnitude of the asymmetric timeliness coefficient decreases substantially (by 28–58%) when the dependent variable is accruals in the Basu (1997) model. Second,...

Despite regulatory reforms aimed at inhibiting aggressive financial reporting, earnings management persists and continues to concern practitioners, regulators, and standard setters. To provide insight into this practice and how to mitigate it, we conduct an experiment to examine the impact of...

This paper make four important contributions to the accounting literature. First, it shows that discretionary accruals are associated with CEO cash compensation, but that the coefficient is significantly less than that on nondiscretionary accruals. Second, a differential reaction is found to...