Since 2010 a number of firms have voluntarily adopted mark-to-market (MTM) accounting for the actuarial gains and losses associated with their defined benefit pension plans. While pension accounting rules have allowed such a choice since 1986, only recently have firms begun to exercise that...

Prior research shows extant discretionary accrual models are misspecified when applied to firms with unusual performance. Nonetheless, research on earnings management and market efficiency frequently uses these models. We examine the specification and power of tests based on performance-matched...

This study assesses whether the accrual-generating process is adequately described by a linear model with respect to a range of underlying determinants examined by prior literature. We document substantial departures from linearity across the distributions of accrual determinants, including...