Financial Accounting Standards Research Initiative

In the regular issue of the FASB Action Alert (February 11) that comes into my inbox, there was a link to a document called “FASB Update, Financial Statement User Edition.”  I haven’t seen this particular form of the FASB Update before; perhaps I’m just not aware of this series.  Here’s the link.  It provides a [...] Read more > >

Those of you who view this site on Internet Explorer are probably finding the posts largely unreadable.  I am hoping to get this fixed in the next day or so.  If you have access to Mozilla Firefox, Chrome or another browser, you should be able to see the site. Sorry! Read more > >

I don’t know what kind of study it might be, but seems like big versus small firms and internal control testing might rise again as an issue.  Did you hear about the recent fraud at the headphone company.  It was in CFO.com.  Let me give you a brief cut from the article. Fraud Case Casts Doubt [...] Read more > >

Due to some very busy schedules, there won’t be any roundtable discussion today.  But look for some announcements soon for upcoming events. Read more > >

Mark Evans, Leslie Hodder and Pat Hopkins just posted a paper on SSRN indicating some benefits to fair value accounting in financial institutions.  From the abstract: For a sample of commercial banks during 1994–2008, we find that accumulated fair value adjustments for investment securities are positively associated with realized income from investment securities in the following [...] Read more > >

Dan Dhaliwal, Vic Naiker, and Farshid Navissi recently posted a paper up on SSRN titled “The Association between Accruals Quality and the Characteristics of Accounting Experts and Mix of Expertise on Audit Committees.” Their research looks at post-SOX data and various characteristics of audit committees that have an impact on accrual quality. “Our results indicate a [...] Read more > >

Sanjeev Bhorjraj, Robert Libby, and Holly Yang have a paper on SSRN titled “Analyzing Guidance at the Firm Level: The Association between Guidance Frequency, Guidance Properties, and Market Reactions.” The paper is the first to examine the relationship between the frequency and type of guidance issued by firms and the accuracy of that guidance and [...] Read more > >

Stephen Ryan, Research on the Fair Value Option, Tuesday, 4pm ET * Update: You can read more about this Round Table Event and see the archived video here. Read more > >

02/03/2010 Steven Orpurt, Research on Cash Flow Reporting, Wednesday, 11am ET Update: View the archived video and comments about this Round Table here. Read more > >

I always enjoy listening to the State of the Union address. If you missed it, I highly recommend at least reading a summary like the one found here. One of the things that President Obama proposed was that congress “provide a tax incentive for all large businesses and all small businesses to invest in new plants [...] Read more > >

On Wednesday, Feb 3rd, 11 am ET, we will be joined by Steven Orpurt of Pepperdine University. Steve will be discussing his paper, entitled “Do Direct Cash Flow Disclosures Help Predict Future Operating Cash Flows and Earnings? This work is co-authored with Yoonseok Zang, also of Singapore Management University, and was recently published in [...] Read more > >

Wow, i just learned the following.  Did not know this … From:  Comment from Michael A. Moran and Abby Joseph Cohen, Goldman Sachs: Global Markets Institute – Accounting Policy Update: SEC takes action on climate change disclosures On January 27, 2010 the SEC approved, by a 3-2 vote, new interpretative guidance on existing disclosure requirements related [...] Read more > >

To what extent do lenders or credit analysts care about lease renewal options? In the proposed lease accounting model, lessees will capitalize the longest lease term that is more likely than not to occur. This means that renewal periods that a lessee is not obligated to renew will be measured as part of the lease [...] Read more > >

Stephen Ryan (NYU) joins FASRI to talk about his recent research on the fair value option in the banking industry.  Stephen is one of the most respected accounting academics studying banking and financial instruments these days, so I expect people will have plenty of questions beyond the research study that will form the heart of [...] Read more > >

Richard Mergenthaler has a paper on SSRN titled “Principles-Based versus Rules-Based Standards and Earnings Management.” When I read the title I thought for sure the article would argue that principles-based standards lead to more earnings management because there was more flexibility. To my surprise, the paper presents arguments that rules-based standards lead to more earnings management. [...] Read more > >

I was excited this past week to read that the IASB recently published a second exposure draft on a portion of IAS 37 Provisions, Contingent Liabilities, and Contingent Assets. I know, excitement might be too strong of a word, but I was looking forward to seeing whether the IASB’s decision on how to measure onerous [...] Read more > >

Typically at the start of every New Year, we spend time thinking about the prior year and all the interesting and exciting events that have happened. 2009 was certainly a banner year for accounting standard setting. As I was thinking back over all that happened and trying to determine what was the most surprising thing [...] Read more > >

I was thinking about Jim’s comments about research helping standard setters.  A long time ago there was some debate on the ability of archival researchers to do ex ante research … some back and forth on that point.  I’m not an archival person so I don’t think about whether they can do ex ante or not, and [...] Read more > >

I spent a good part of the weekend reading PhD files.  It seems like a fairly strong year, perhaps because the economy has closed out other opportunities.  (Many applicants hail from Wall Street).  I’d love to hear your impressions of any application pools you have seen.  But if you are one of the students who [...] Read more > >

An interesting article was posted on SSRN last month titled Rules-Based Accounting Standards and Litigation by Dain Donelson, John McInnis, and Richard Mergenthaler. The article discusses the association between rules-based standards and litigation and whether rules serve more to convict or to defend firms. In the conclusion, the authors write: Overall, we find support for the [...] Read more > >