ASC 842, the new lease standard in the U.S., tightened lease reporting requirements and significantly increased the balance sheet’s total leverage. In this study, we focus on the balance sheet effect of ASC 842 and examine whether the increased disclosures and the formal recognition of...

This study examines whether ex ante securities litigation risk prompts firms to make more or less voluntary restatements. The litigation risk is captured by a new measure based on the dismissal rate of the district court where the firm is headquartered. We find that misreporting firms...