The adoption of SAB 101, a regulation affecting revenue recognition, was controversial. The SEC argued that firms were using their revenue recognition practices to manage earnings, while opponents asserted that eliminating accepted revenue recognition practices would decrease the quality of...

Internal control regulation effectiveness remains controversial given the recent financial crisis. To address this issue we examine the financial reporting effects of the Federal Depository Insurance Corporation Improvement Act (FDICIA) internal control provisions. Exemptions from these...

This study examines corporate integrity culture—that is, a firm’s shared values and behaviors related to compliance, trustworthiness, and ethics. Different from prior research that associates culture measures with general firm-level outcomes, we evaluate the pervasiveness of the integrity...

This research studies one specific financial instrument – Mortgage Servicing Rights (MSRs) and examines whether the fair value of MSRs based on managerial inputs (Level 3) has financial reporting characteristics that differ from the fair value of MSRs based on market inputs (Level 2). Since...

The synthetic lease is a hybrid financing structure that allows a company to obtain many of the benefits of asset ownership, including capital lease treatment for tax purposes, while treating lease payments as operating expenses on the firm's income statement. Proponents of these off balance...

We consider how corporate culture affects regulatory compliance activities across functions within a firm and investigate the economic consequences of a weak compliance culture. We examine a group of publicly traded pharmaceutical companies over the period of 2003 to 2013 that are required to...

Operating leases have grown significantly as a source of corporate financing over the last 30 years. Their off-balance sheet treatment, which may in part explain their popularity, raises concern that financial risk may be misjudged and capital misallocated. Prior research evidence on the above...

This study examines whether the revised lease standards (ASC 842 and IFRS 16) make U.S. GAAP-based accounting amounts more comparable with IFRS-based accounting amounts. Our study is motivated by the FASB and the IASB’s call for research on the comparability of the revised lease standards. We...