6/1/2022 — This study finds that the requirement of ASC 842 for firms to capitalize operating leases in financial statements beginning in 2019 resulted in firms affected by the standard reducing existing debt amounts on average between 7% and 10% relative to unaffected firms. We also find that firms with greater operating lease capitalization as a result of implementation of ASC 842 are more likely to reduce their reliance on existing debt.

• KEYWORD(S):
• accounting

12/27/2022 — This study examines whether the disclosure of critical audit matters (CAMs) in the expanded audit report in China is associated with an increase in audited financial statement quality. Specifically, we predict and find that timeliness of goodwill impairment by Chinese listed firms increased after the disclosure of CAMs related to goodwill.

• KEYWORD(S):
• accounting
• financial reporting

2/9/2023 — This study documents that big bath accounting following CEO turnovers is pervasive worldwide and shows that the extent to which CEOs engage in big bath accounting is associated with the degree of discretion they have available in their respective countries. Our analysis is based on a new country-level measure for managerial discretion derived from a questionnaire survey with more than 500 strategy consultants from 35 countries.

• KEYWORD(S):
• accounting
• global business

3/28/2022 — This study examines the information content of risk factor disclosures following private debt issuance. Loan issuance is an information-intensive activity that significantly increases private information production through borrower-lender interactions.

• KEYWORD(S):
• accounting

6/24/2022 — This study uses passage of the Dodd-Frank Act as a setting to examine whether changes in legal liability exposure faced by credit rating agencies affect the number of financial statement information signals required before rating changes. For upgrades, we predict and find that the greater legal exposure after the Act incentivized rating agencies to require more information signals, i.e., a greater number of prior quarters in which upgrades were implied by financial statement information.

• KEYWORD(S):
• finance
• private credit