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Abbie J Smith - One of the best experts on this subject based on the ideXlab platform.
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transparency Financial Accounting information and corporate governance
Economic and Policy Review, 2005Co-Authors: Robert M Bushman, Abbie J SmithAbstract:Audited Financial statements along with supporting disclosures form the foundation of the firm-specific information set available to investors and regulators. In this paper, the authors discuss economics-based research focused on the properties of Accounting systems and the surrounding institutional environment important to effective governance of firms. They provide a framework for understanding the operation of Accounting information in an economy, discuss a broad range of important research findings, present a conceptual framework for characterizing and measuring corporate transparency at the country level, and isolate a number of future research possibilities.
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Financial Accounting information organizational complexity and corporate governance systems
Journal of Accounting and Economics, 2004Co-Authors: Rob Bushman, Ellen Engel, Qi Chen, Abbie J SmithAbstract:The purpose of this paper is to investigate how governance systems of large public U.S. corporations vary with information properties of numbers produced by their Financial Accounting systems. We argue that in firms whose current Accounting numbers do a relatively poor job of capturing the effects of the firm's current activities and outcomes on shareholder value, the Accounting numbers are less effective in the governance setting. We predict that such firms will substitute costly governance mechanisms to compensate for their less useful Accounting numbers. We explore whether governance systems vary with the timeliness of earnings by examining the cross-sectional relation between proxies for earnings timeliness and subsequent corporate governance systems of 784 firms in the Fortune 1000. The governance systems we consider include board composition, stockholdings of inside and outside directors, ownership concentration and the structure of executive compensation. Our results support a significant negative relation between our timeliness metrics and subsequent costly corporate governance mechanisms after controlling for other firm characteristics.
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transparency Financial Accounting information and corporate governance part 1 a review of the literature on corporate governance
Federal Reserve Bank of New York Economic policy review, 2003Co-Authors: Robert M Bushman, Abbie J SmithAbstract:1. INTRODUCTION Vibrant public securities markets rely on complex systems of supporting institutions that promote the governance of publicly traded companies. Corporate governance structures serve: 1) to ensure that minority shareholders receive reliable information about the value of firms and that a company's managers and large shareholders do not cheat them out of the value of their investments, and 2) to motivate managers to maximize firm value instead of pursuing personal objectives. (1) Institutions promoting the governance of firms include reputational intermediaries such as investment banks and audit firms, securities laws and regulators such as the Securities and Exchange Commission (SEC) in the United States, and disclosure regimes that produce credible firm-specific information about publicly traded firms. In this paper, we discuss economics-based research focused primarily on the governance role of publicly reported Financial Accounting information. Financial Accounting information is the product of corporate Accounting and external reporting systems that measure and routinely disclose audited, quantitative data concerning the Financial position and performance of publicly held firms. Audited balance sheets, income statements, and cash-flow statements, along with supporting disclosures, form the foundation of the firm-specific information set available to investors and regulators. Developing and maintaining a sophisticated Financial disclosure regime is not cheap. Countries with highly developed securities markets devote substantial resources to producing and regulating the use of extensive Accounting and disclosure rules that publicly traded firms must follow. Resources expended are not only Financial, but also include opportunity costs associated with deployment of highly educated human capital, including accountants, lawyers, academicians, and politicians. In the United States, the SEC, under the oversight of the U.S. Congress, is responsible for maintaining and regulating the required Accounting and disclosure rules that firms must follow. These rules are produced both by the SEC itself and through SEC oversight of private standards-setting bodies such as the Financial Accounting Standards Board and the Emerging Issues Task Force, which in turn solicit input from business leaders, academic researchers, and regulators around the world. In addition to the Accounting standards-setting investments undertaken by many individual countries and securities exchanges, there is currently a major, well-funded effort in progress, under the auspices of the International Accounting Standards Board (IASB), to produce a single set of Accounting standards that will ultimately be acceptable to all countries as the basis for cross-border financing transactions. (2) The premise behind governance research in Accounting is that a significant portion of the return on investment in Accounting regimes derives from enhanced governance of firms, which in turn facilitates the operation of securities markets and the efficient flow of scarce human and Financial capital to promising investment opportunities. Designing a system that provides governance value involves difficult tradeoffs between the reliability and relevance of reported Accounting information. While the judgments and expectations of firms' managers are an inextricable part of any serious Financial reporting model, the governance value of Financial Accounting information derives in large part from an emphasis on the reporting of objective, verifiable outcomes of firms. An emphasis on verifiable outcomes produces a rich set of variables that can support a wide range of enforceable contractual arrangements and that form a basis for outsiders to monitor and discipline the actions and statements of insiders. (3) A fundamental objective of governance research in Accounting is to investigate the properties of Accounting systems and the surrounding institutional environment important to the effective governance of firms. …
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Financial Accounting information and corporate governance
Journal of Accounting and Economics, 2001Co-Authors: Robert M Bushman, Abbie J SmithAbstract:Abstract This paper reviews and proposes additional research concerning the role of publicly reported Financial Accounting information in the governance processes of corporations. We first discuss research on the use of Financial Accounting in managerial incentive plans and explore future research directions. We then propose that governance research be extended to explore more comprehensively the use of Financial Accounting information in additional corporate control mechanisms, and suggest opportunities for expanding such research. We also propose cross-country research to investigate more directly the effects of Financial Accounting information on economic performance through its role in governance and more generally.
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Financial Accounting information and corporate governance
Journal of Accounting and Economics, 2001Co-Authors: Robert M Bushman, Abbie J SmithAbstract:This paper reviews and proposes additional research concerning the role of publicly reported Financial Accounting information in the governance processes of corporations. We first review and analyze research on the use of Financial Accounting measures in managerial incentive plans and explore future research directions. We then propose that governance research be extended to explore more comprehensively the use of Financial Accounting information in additional corporate control mechanisms, and suggest opportunities for expanding such research in the U.S. and abroad, including the consideration of interactions among control mechanisms. We also propose research to investigate more directly the effects of Financial Accounting information on economic performance through its role in governance and more generally using a cross-country approach.
Robert M Bushman - One of the best experts on this subject based on the ideXlab platform.
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thoughts on Financial Accounting and the banking industry
Journal of Accounting and Economics, 2014Co-Authors: Robert M BushmanAbstract:Abstract I provide big picture comments on the review of the banking literature in Accounting by Beatty and Liao (2014) . Beatty and Liao (2014) does a service to the Accounting field by providing an intelligent, well organized and accessible point of entry to banking research in Accounting. I complement Beatty and Liao by presenting my observations on the role of Financial Accounting in banking, focusing my discussion on real effects of Accounting policy choices on individual bank risk taking and codependence of risk among banks. I also offer ideas on future research directions.
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thoughts on Financial Accounting and the banking industry
Social Science Research Network, 2014Co-Authors: Robert M BushmanAbstract:Complementing the recent review of the banking literature in Accounting by Beatty and Liao (2014), I offer my own thoughts on the role of Financial Accounting in banking. I focus my discussion on real effects of Accounting policy choices on individual bank risk taking and codependence of risk among banks. I emphasize the role played by managerial discretion over Accounting decisions in influencing bank stability through two distinct Accounting channels: Accounting numbers as numerical quantities and bank transparency. Accounting policy can affect bank stability through its influence over the Accounting numbers as quantitative inputs into numerical calculations of regulatory covenants such as bank capital and leverage ratios. Accounting policy choices can also affect bank transparency which can impact bank stability by influencing the intensity of market monitoring of bank risk-taking, the extent of financing frictions facing banks, and banks’ opportunities to engage in risk-shifting activities. I also offer ideas on future research directions.
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transparency Financial Accounting information and corporate governance
Economic and Policy Review, 2005Co-Authors: Robert M Bushman, Abbie J SmithAbstract:Audited Financial statements along with supporting disclosures form the foundation of the firm-specific information set available to investors and regulators. In this paper, the authors discuss economics-based research focused on the properties of Accounting systems and the surrounding institutional environment important to effective governance of firms. They provide a framework for understanding the operation of Accounting information in an economy, discuss a broad range of important research findings, present a conceptual framework for characterizing and measuring corporate transparency at the country level, and isolate a number of future research possibilities.
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transparency Financial Accounting information and corporate governance part 1 a review of the literature on corporate governance
Federal Reserve Bank of New York Economic policy review, 2003Co-Authors: Robert M Bushman, Abbie J SmithAbstract:1. INTRODUCTION Vibrant public securities markets rely on complex systems of supporting institutions that promote the governance of publicly traded companies. Corporate governance structures serve: 1) to ensure that minority shareholders receive reliable information about the value of firms and that a company's managers and large shareholders do not cheat them out of the value of their investments, and 2) to motivate managers to maximize firm value instead of pursuing personal objectives. (1) Institutions promoting the governance of firms include reputational intermediaries such as investment banks and audit firms, securities laws and regulators such as the Securities and Exchange Commission (SEC) in the United States, and disclosure regimes that produce credible firm-specific information about publicly traded firms. In this paper, we discuss economics-based research focused primarily on the governance role of publicly reported Financial Accounting information. Financial Accounting information is the product of corporate Accounting and external reporting systems that measure and routinely disclose audited, quantitative data concerning the Financial position and performance of publicly held firms. Audited balance sheets, income statements, and cash-flow statements, along with supporting disclosures, form the foundation of the firm-specific information set available to investors and regulators. Developing and maintaining a sophisticated Financial disclosure regime is not cheap. Countries with highly developed securities markets devote substantial resources to producing and regulating the use of extensive Accounting and disclosure rules that publicly traded firms must follow. Resources expended are not only Financial, but also include opportunity costs associated with deployment of highly educated human capital, including accountants, lawyers, academicians, and politicians. In the United States, the SEC, under the oversight of the U.S. Congress, is responsible for maintaining and regulating the required Accounting and disclosure rules that firms must follow. These rules are produced both by the SEC itself and through SEC oversight of private standards-setting bodies such as the Financial Accounting Standards Board and the Emerging Issues Task Force, which in turn solicit input from business leaders, academic researchers, and regulators around the world. In addition to the Accounting standards-setting investments undertaken by many individual countries and securities exchanges, there is currently a major, well-funded effort in progress, under the auspices of the International Accounting Standards Board (IASB), to produce a single set of Accounting standards that will ultimately be acceptable to all countries as the basis for cross-border financing transactions. (2) The premise behind governance research in Accounting is that a significant portion of the return on investment in Accounting regimes derives from enhanced governance of firms, which in turn facilitates the operation of securities markets and the efficient flow of scarce human and Financial capital to promising investment opportunities. Designing a system that provides governance value involves difficult tradeoffs between the reliability and relevance of reported Accounting information. While the judgments and expectations of firms' managers are an inextricable part of any serious Financial reporting model, the governance value of Financial Accounting information derives in large part from an emphasis on the reporting of objective, verifiable outcomes of firms. An emphasis on verifiable outcomes produces a rich set of variables that can support a wide range of enforceable contractual arrangements and that form a basis for outsiders to monitor and discipline the actions and statements of insiders. (3) A fundamental objective of governance research in Accounting is to investigate the properties of Accounting systems and the surrounding institutional environment important to the effective governance of firms. …
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Financial Accounting information and corporate governance
Journal of Accounting and Economics, 2001Co-Authors: Robert M Bushman, Abbie J SmithAbstract:Abstract This paper reviews and proposes additional research concerning the role of publicly reported Financial Accounting information in the governance processes of corporations. We first discuss research on the use of Financial Accounting in managerial incentive plans and explore future research directions. We then propose that governance research be extended to explore more comprehensively the use of Financial Accounting information in additional corporate control mechanisms, and suggest opportunities for expanding such research. We also propose cross-country research to investigate more directly the effects of Financial Accounting information on economic performance through its role in governance and more generally.
Thomas L Stober - One of the best experts on this subject based on the ideXlab platform.
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response to the Financial Accounting standards board s and the international Accounting standards board s joint discussion paper entitled preliminary views on revenue recognition in contracts with customers
Accounting Horizons, 2010Co-Authors: Robert H Colson, Shyam Sunder, Theodore E Christensen, Karim Jamal, Stephen R Moehrle, James A Ohlson, Stephen H Penman, Thomas L Stober, Robert Bloomfield, Ross L WattsAbstract:SYNOPSIS: The FASB and the IASB recently issued a joint discussion paper entitled, Preliminary Views on Revenue Recognition in Contracts with Customers. The boards requested comments on whether their proposed model for revenue recognition would improve the usefulness of the Financial statement information for Financial decision makers. This paper summarizes the AAA’s Financial Accounting Standards Committee’s responses to several of the boards’ specific questions. We support the boards’ proposed comprehensive revenue recognition standard based on the following options: (1) the customer consideration approach (based on initial contract price measurement); (2) no recognition of revenue at contract inception (by assigning the initial contract price to performance obligations); and (3) allocation of the transaction price to multiple performance obligations based on the relative stand-alone prices of each performance obligation. We also recommend that the boards carefully consider the following clarifications ...
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response to the Financial Accounting standards board s and the international Accounting standard board s joint discussion paper entitled preliminary views on Financial statement presentation
Accounting Horizons, 2010Co-Authors: Stephen R Moehrle, Shyam Sunder, Robert H Colson, Robert J Bloomfield, Theodore E Christensen, Karim Jamal, James A Ohlson, Stephen H Penman, Thomas L Stober, Ross L WattsAbstract:SYNOPSIS: The Financial Accounting Standards Board (hereafter, FASB) and the International Accounting Standard Board (hereafter, IASB) issued a joint discussion paper titled Preliminary Views on Financial Statement Presentation. The Boards are seeking comments on whether their proposed model for Financial statement presentation would improve the usefulness of the Financial statement information for Financial decision makers. This paper sets forth the American Accounting Association Financial Accounting Standards Committee (hereafter, the committee) summary comments as well as responses to several of the FASB’s and IASB’s (hereafter, jointly mentioned, the Boards) specific objectives and principles-related questions. Overall, the committee believes that the model has several appealing features, but also has several potential problems. Many of the problems discussed related to potential learning impediments for users to adapt to the new presentation format.
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response to the sec s proposed rule roadmap for the potential use of Financial statements prepared in accordance with international Financial reporting standards ifrs by u s issuers
Accounting Horizons, 2010Co-Authors: Mark T Bradshaw, Patrick E Hopkins, Carolyn M Callahan, Elizabeth A Gordon, Leslie D Hodder, Mark J Kohlbeck, Robert Laux, Sarah E Mcvay, Jack Ciesielski, Thomas L StoberAbstract:SYNOPSIS: The Financial Reporting Policy Committee of the Financial Accounting and Reporting Section of the American Accounting Association (hereafter, the AAA FRPC or the committee) is charged with responding to discussion memoranda and exposure drafts on Financial Accounting and reporting issues. This response is to the SEC’s proposed rule, Roadmap for the Potential Use of Financial Statements Prepared in Accordance with International Financial Reporting Standards (IFRS) by U.S. Issuers. Based on a review of the literature, the AAA FRPC has concluded that a move to an international set of Financial reporting standards is a desirable goal. We have also concluded that continued convergence of U.S. GAAP with IFRS by joint relations between the International Accounting Standards Board (hereafter, IASB) and the Financial Accounting Standards Board (hereafter, FASB) is preferable to near-term adoption of IFRS as a strategy for convergence.
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response to the Financial Accounting standards board s and the international Accounting standard board s joint discussion paper entitled preliminary views on revenue recognition in contracts with customers
2009Co-Authors: Robert H Colson, Robert J Bloomfield, Theodore E Christensen, Karim Jamal, Stephen R Moehrle, James A Ohlson, Stephen H Penman, Thomas L Stober, Gary John Previts, Shyam SunderAbstract:The FASB and the IASB recently issued a joint discussion paper entitled, Preliminary Views on Revenue Recognition in Contracts with Customers. The Boards requested comments on whether their proposed model for revenue recognition would improve the usefulness of the Financial statement information for Financial decision makers. This paper sets forth the AAA's Financial Accounting Standards Committee's responses to several of the Boards' specific questions. In summary, we support the Boards' proposed comprehensive revenue recognition standard based on the following options: (1) the customer consideration approach (based on initial contract price measurement); (2) no recognition of revenue at contract inception (by assigning the initial contract price to performance obligations); (3) allocation of the transaction price to multiple performance obligations based on the relative stand-alone prices of each performance obligation. We also recommend that the Boards carefully consider the following clarifications as they develop the final exposure draft. The definition of a contract should include the words legally enforceable to describe the contract. A performance obligation must be verifiable. While the transfer of an asset to the customer or the acceptance of a service by the customer normally signals the recognition of revenue, we encourage the Boards to carefully consider situations (like long-term construction or mining) when the completion of intermediate performance obligations could trigger revenue recognition prior to the transfer of title. Absent special consideration of these situations, companies may be forced to re-write contracts in sub-optimal ways in an effort to recognize revenue continuously throughout a long-term construction project or in the process of mining or farming. Consider the difficulties that may arise in allocating the initial transaction price to multiple performance obligation contracts when the individual performance obligations are not normally sold on a stand-alone basis.
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response to the Financial Accounting standards board s and the international Accounting standard board s joint discussion paper entitled preliminary views on Financial statement presentation
2009Co-Authors: Robert H Colson, Robert J Bloomfield, Theodore E Christensen, Karim Jamal, Stephen R Moehrle, James A Ohlson, Stephen H Penman, Thomas L Stober, Ross L WattsAbstract:The Financial Accounting Standards Board's (FASB's) and the International Accounting Standard Board's (IASB's) issued a joint Discussion Paper entitled, Preliminary Views on Financial Statement Presentation. The Boards are seeking comments on whether their proposed model for Financial statement presentation would improve the usefulness of the Financial statement information for Financial decision makers. This paper sets forth the AAA's Financial Accounting Standards Committee's summary comments as well as responses to several of the Boards' specific objectives and principles-related questions. Overall, we believe that the model has several appealing qualities, but also has several potential problems. Many of the problems that we discuss related to potential learning impediments for users to adapt to the new presentation format.
Bradley P Lindsey - One of the best experts on this subject based on the ideXlab platform.
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using Financial Accounting data to examine the effect of foreign operations located in tax havens and other countries on u s multinational firms tax rates
Journal of Accounting Research, 2009Co-Authors: Scott D Dyreng, Bradley P LindseyAbstract:This paper investigates the effect tax havens and other foreign jurisdictions have on the income tax rates of multinational firms based in the United States. We develop a new regression methodology using Financial Accounting data to estimate the average worldwide, federal, and foreign tax rates on worldwide, federal, and foreign pretax book income for a large sample of U.S. firms with and without tax haven operations. We find that on average U.S. firms that disclosed material operations in at least one tax haven country have a worldwide tax burden on worldwide income that is approximately 1.5 percentage points lower than firms without operations in at least one tax haven country. Our results also show that U.S. firms face a 4.4% current federal tax rate on foreign income whether or not they have tax haven operations. Finally, we find that U.S. firms with operations in some tax haven countries have higher federal tax rates on foreign income than other firms. This result suggests that in some cases, tax haven operations may increase U.S. tax collections at the expense of foreign country tax collections.
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using Financial Accounting data to examine the effect of foreign operations located in tax havens and other countries on us multinational firms tax rates
Social Science Research Network, 2009Co-Authors: Scott D Dyreng, Bradley P LindseyAbstract:This paper investigates the effect tax havens and other foreign jurisdictions have on the income tax rates of multinational firms based in the United States. We develop a new regression methodology using Financial Accounting data to estimate the average worldwide, federal, and foreign tax rates on worldwide, federal, and foreign pre-tax income for a large sample of US firms with and without tax haven operations. We find that on average US firms that disclosed material operations in at least one tax haven country have a worldwide tax burden on worldwide income that is approximately 1.5 percentage points lower than firms without operations in at least one tax haven country. Our results also show that US firms face a 4.4 percent current federal tax rate on foreign income whether or not they have tax haven operations. Finally, we find that US firms with operations in some tax haven countries have higher federal tax rates on foreign income than other firms. This result suggests that in some cases, tax haven operations may increase US tax collections at the expense of foreign country tax collections.
Scott D Dyreng - One of the best experts on this subject based on the ideXlab platform.
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using Financial Accounting data to examine the effect of foreign operations located in tax havens and other countries on u s multinational firms tax rates
Journal of Accounting Research, 2009Co-Authors: Scott D Dyreng, Bradley P LindseyAbstract:This paper investigates the effect tax havens and other foreign jurisdictions have on the income tax rates of multinational firms based in the United States. We develop a new regression methodology using Financial Accounting data to estimate the average worldwide, federal, and foreign tax rates on worldwide, federal, and foreign pretax book income for a large sample of U.S. firms with and without tax haven operations. We find that on average U.S. firms that disclosed material operations in at least one tax haven country have a worldwide tax burden on worldwide income that is approximately 1.5 percentage points lower than firms without operations in at least one tax haven country. Our results also show that U.S. firms face a 4.4% current federal tax rate on foreign income whether or not they have tax haven operations. Finally, we find that U.S. firms with operations in some tax haven countries have higher federal tax rates on foreign income than other firms. This result suggests that in some cases, tax haven operations may increase U.S. tax collections at the expense of foreign country tax collections.
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using Financial Accounting data to examine the effect of foreign operations located in tax havens and other countries on us multinational firms tax rates
Social Science Research Network, 2009Co-Authors: Scott D Dyreng, Bradley P LindseyAbstract:This paper investigates the effect tax havens and other foreign jurisdictions have on the income tax rates of multinational firms based in the United States. We develop a new regression methodology using Financial Accounting data to estimate the average worldwide, federal, and foreign tax rates on worldwide, federal, and foreign pre-tax income for a large sample of US firms with and without tax haven operations. We find that on average US firms that disclosed material operations in at least one tax haven country have a worldwide tax burden on worldwide income that is approximately 1.5 percentage points lower than firms without operations in at least one tax haven country. Our results also show that US firms face a 4.4 percent current federal tax rate on foreign income whether or not they have tax haven operations. Finally, we find that US firms with operations in some tax haven countries have higher federal tax rates on foreign income than other firms. This result suggests that in some cases, tax haven operations may increase US tax collections at the expense of foreign country tax collections.
