This study examines how generally accepted accounting principles influence firm responses to Securities and Exchange Commission rule changes. It shows that a change in insider holding requirements for employee stock options led to a decrease in the use of stock appreciation rights, a response...

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...