The Public Company Accounting Oversight Board recently proposed amendments to the standard audit report that would require the disclosure of critical audit matters (CAMs), and the Securities and Exchange Commission continues to evaluate the use of principles-based (imprecise) accounting...

This paper analyzes the accounting reasoning of two expert accounting witnesses at the 2006 trial of Enron executives who testified that the financial reporting of Enron conformed fully with US generally accepted accounting principles [GAAP]. We analyze the experts' evidence using argumentation...

The purpose of this study is to empirically examine the relations between audit outcomes and accounting standard design (principles-based vs. rules-based) for US firms. Considering that audit outcomes may vary with audit risk, which may differ under different accounting standards, we examine and...

We examine how Big N auditors' changing incentives impact their comment-letter lobbying on U.S. GAAP over the first thirty-four years of the FASB (1973-2006). In particular, we focus on the influence of auditors' lobbying incentives arising from two basic factors: managing expected litigation...

A recent FASB standard requires an entity's management to assess the entity's ability to continue as a going concern and disclose substantial doubt about such. In contextualized experiments wherein the entity's auditor does not issue a going concern opinion and the entity subsequently fails, we...

Following the fraud scandals in large companies like Enron, WorldCom, and Xerox, investors' concern about fraud in general and fraudulent financial reporting in particular increased and is on the rise. In response to these concerns, auditing standards setters have issued fraud standards that...

The concept of materiality, originating in the accounting domain and applied in the auditing domain, is an essential tool for improving audit quality. A renewed interest in materiality research emerged in Australia after submitting Exposure Draft no. 243 by the Australian Accounting Standards...

In recent years we have been inundated with news of corporations under investigation because of questionable accounting practices. In the worst case scenarios, companies such as Enron have gone bankrupt and ceased to exist because of lack of oversight and controls. Greedy high-level executives...

Over the past two decades, the regulatory landscape for non-GAAP reporting has evolved significantly. Despite a temporary decline in the frequency of non-GAAP reporting following Regulation G, the incidence of non-GAAP disclosure has continued to increase steadily, leading to a current all-time...