Financial Accounting Theory 2018/2019
Empirical Research Summary
,Index:
General Structure Financial Accounting Theory 2019 - Empirical Research 4
Lecture 1: Introduction 5
Paper 01. Positive Accounting Theory: A Ten Year Perspective. Watts, R., G. Zimmerman (1990); TAR 65:
131-156. 5
Paper 02. The changing landscape of accrual accounting. Bushman, R. M., Lerman, A., & Zhang, X. F. (2016).
JAR, 54: 41-78 6
Paper 03. The timeliness of accounting write-downs by US Financial Institutions during the Financial Crisis of
2007 – 2008. Vyas, D. (2011). JAR 49: 823-860. 7
Lecture 2: Value Relevance & ERC 9
Paper 04. Ball, R., P. Brown (1968) An Empirical Evaluation of Accounting Income Numbers. Journal of
Accounting Research 6: 159-177. 9
Paper 05. Landsman, W. and E. Maydew (2002) Has the information content of quarterly earnings
announcements declined in the past three decades? Journal of Accounting Research, 40(3), 797-808. 10
Lecture 3: Financial Reporting Quality 12
Paper 06. Dechow, P., R. Sloan, and A. Sweeney (1995) Detecting Earnings Management, The Accounting
Review 70: 193-225. 12
Paper 07. Dechow, P., I. Dichev (2002) The Quality of Accruals and Earnings: The Role of Accrual Estimation
Errors, The Accounting Review 77: 35-59. 13
Lecture 4: Earnings Frequency Distributions 15
Paper 08. Burgstahler, D., I. Dichev (1997) Earnings Management to Avoid Earnings Decreases and Losses.
Journal of Accounting and Economics 24: 99-127. 15
Paper 09. Bernard, D., D. Burgstahler, and D. Kaya (2018) Size Management by European Private Firms to
Minimize Proprietary Costs of Disclosure. Journal of Accounting and Economics 66: 94-122. 16
Lecture 5: Accounting Conservatism 19
Paper 10. Basu, S. (1997) The Conservatism Principle and the Asymmetric Timeliness of Earnings. Journal of
Accounting and Economics 24: 3-37. 19
Paper 11. Ball, R, and L. Shivakumar (2005) Earnings Quality in UK Private firms: Comparative Loss
Recognition Timeliness. Journal of Accounting and Economics 39: 83-128. 20
Lecture 6: Voluntary Disclosure 23
Paper 12. Lang, M., and R. Lundholm (1996) Corporate Disclosure Policy and Analyst Behavior. The Accounting
Review, 71: 467-492. 23
Paper 13. Gong, G., Li, L. and H. Xie (2009) The association between Earnings forecast errors and accruals,
The Accounting Review, 84: 497-530. 24
Lecture 7: Standards IFRS 27
Paper 14. Barth, M., W. Landsman, and M. Lang (2008) International Accounting Standards and Accounting
Quality, Journal of Accounting Research 46: 467-498. 27
Paper 15. Daske, H., L. Hail, C. Leuz and R. Verdi (2008) Mandatory IFRS reporting around the world: Early
evidence on the economic consequences, Journal of Accounting Research 46: 1085 – 1142. 28
Lecture 9: Contracts/Incentives: Debt contracting & Executive compensation 31
Paper 16. Bharath, S., J. Sunder, and S. Sunder (2008) Accounting Quality and Debt Contracting. The
Accounting Review 83: 1-28. 31
Paper 17. Bergstresser, D. and T. Philippon (2006) CEO incentives and earnings management, Journal of
Financial Economics 80: 511-529. 33
2
, Lecture 11: Enforcement: Auditors (private) & Political Connections (public) 35
Paper 18. Francis, J. and M. Yu (2009) Big 4 Office Size and Audit Quality, TAR 84 : 1521-1552. 35
Paper 19. Minnis, M. (2011) The Value of Financial Statement Verification in Debt Financing: Evidence from
Private U.S. Firms, Journal of Accounting Research 49: 457-506. 36
Paper 20. Christensen, H.B., L. Hail, and C. Leuz (2013) Mandatory IFRS reporting and changes in enforcement.
Journal of Accounting and Economics 56.2-3 (2013): 147-177. 37
Paper 21. Correia, M (2014) Political Connections and SEC Enforcement, Journal of Accounting and Economics
57: 241-262. 38
Lecture 13: Environment: Competition & Information intermediaries 40
Paper 22. Berger, P., and R. Hann (2007), Segment Profitability and the Proprietary and Agency Costs of
Disclosure, The Accounting Review 82: 869-906. 40
Paper 23. Bushee, B., J. Core, W. Guay, and S. Hamm (2010) The Role of the Business Press as an Information
Intermediary, Journal of Accounting Research 48: 1-20. 41
Summary Additional Reading: Financial Accounting Theory (Scott) 43
Chapter 1: Introduction Scott 43
Chapter 2: Accounting under Ideal Conditions 43
Chapter 3: Decision Usefulness approach 44
Chapter 4: Efficient Securities Markets 44
Chapter 5: The value relevance of accounting information. 45
Chapter 6: The measurement approach to decision usefulness 45
Chapter 7: Principle Based Measurement 46
Chapter 8: The efficient contracting approach to decision usefulness & Chapter 9 Agency Conflicts 47
Chapter 10: Executive Compensation 49
Chapter 11: Earnings Management 51
Chapter 12: Standard Setting: Economic Issues 53
Chapter 13: Standard Setting: Political Issues 55
3
Empirical Research Summary
,Index:
General Structure Financial Accounting Theory 2019 - Empirical Research 4
Lecture 1: Introduction 5
Paper 01. Positive Accounting Theory: A Ten Year Perspective. Watts, R., G. Zimmerman (1990); TAR 65:
131-156. 5
Paper 02. The changing landscape of accrual accounting. Bushman, R. M., Lerman, A., & Zhang, X. F. (2016).
JAR, 54: 41-78 6
Paper 03. The timeliness of accounting write-downs by US Financial Institutions during the Financial Crisis of
2007 – 2008. Vyas, D. (2011). JAR 49: 823-860. 7
Lecture 2: Value Relevance & ERC 9
Paper 04. Ball, R., P. Brown (1968) An Empirical Evaluation of Accounting Income Numbers. Journal of
Accounting Research 6: 159-177. 9
Paper 05. Landsman, W. and E. Maydew (2002) Has the information content of quarterly earnings
announcements declined in the past three decades? Journal of Accounting Research, 40(3), 797-808. 10
Lecture 3: Financial Reporting Quality 12
Paper 06. Dechow, P., R. Sloan, and A. Sweeney (1995) Detecting Earnings Management, The Accounting
Review 70: 193-225. 12
Paper 07. Dechow, P., I. Dichev (2002) The Quality of Accruals and Earnings: The Role of Accrual Estimation
Errors, The Accounting Review 77: 35-59. 13
Lecture 4: Earnings Frequency Distributions 15
Paper 08. Burgstahler, D., I. Dichev (1997) Earnings Management to Avoid Earnings Decreases and Losses.
Journal of Accounting and Economics 24: 99-127. 15
Paper 09. Bernard, D., D. Burgstahler, and D. Kaya (2018) Size Management by European Private Firms to
Minimize Proprietary Costs of Disclosure. Journal of Accounting and Economics 66: 94-122. 16
Lecture 5: Accounting Conservatism 19
Paper 10. Basu, S. (1997) The Conservatism Principle and the Asymmetric Timeliness of Earnings. Journal of
Accounting and Economics 24: 3-37. 19
Paper 11. Ball, R, and L. Shivakumar (2005) Earnings Quality in UK Private firms: Comparative Loss
Recognition Timeliness. Journal of Accounting and Economics 39: 83-128. 20
Lecture 6: Voluntary Disclosure 23
Paper 12. Lang, M., and R. Lundholm (1996) Corporate Disclosure Policy and Analyst Behavior. The Accounting
Review, 71: 467-492. 23
Paper 13. Gong, G., Li, L. and H. Xie (2009) The association between Earnings forecast errors and accruals,
The Accounting Review, 84: 497-530. 24
Lecture 7: Standards IFRS 27
Paper 14. Barth, M., W. Landsman, and M. Lang (2008) International Accounting Standards and Accounting
Quality, Journal of Accounting Research 46: 467-498. 27
Paper 15. Daske, H., L. Hail, C. Leuz and R. Verdi (2008) Mandatory IFRS reporting around the world: Early
evidence on the economic consequences, Journal of Accounting Research 46: 1085 – 1142. 28
Lecture 9: Contracts/Incentives: Debt contracting & Executive compensation 31
Paper 16. Bharath, S., J. Sunder, and S. Sunder (2008) Accounting Quality and Debt Contracting. The
Accounting Review 83: 1-28. 31
Paper 17. Bergstresser, D. and T. Philippon (2006) CEO incentives and earnings management, Journal of
Financial Economics 80: 511-529. 33
2
, Lecture 11: Enforcement: Auditors (private) & Political Connections (public) 35
Paper 18. Francis, J. and M. Yu (2009) Big 4 Office Size and Audit Quality, TAR 84 : 1521-1552. 35
Paper 19. Minnis, M. (2011) The Value of Financial Statement Verification in Debt Financing: Evidence from
Private U.S. Firms, Journal of Accounting Research 49: 457-506. 36
Paper 20. Christensen, H.B., L. Hail, and C. Leuz (2013) Mandatory IFRS reporting and changes in enforcement.
Journal of Accounting and Economics 56.2-3 (2013): 147-177. 37
Paper 21. Correia, M (2014) Political Connections and SEC Enforcement, Journal of Accounting and Economics
57: 241-262. 38
Lecture 13: Environment: Competition & Information intermediaries 40
Paper 22. Berger, P., and R. Hann (2007), Segment Profitability and the Proprietary and Agency Costs of
Disclosure, The Accounting Review 82: 869-906. 40
Paper 23. Bushee, B., J. Core, W. Guay, and S. Hamm (2010) The Role of the Business Press as an Information
Intermediary, Journal of Accounting Research 48: 1-20. 41
Summary Additional Reading: Financial Accounting Theory (Scott) 43
Chapter 1: Introduction Scott 43
Chapter 2: Accounting under Ideal Conditions 43
Chapter 3: Decision Usefulness approach 44
Chapter 4: Efficient Securities Markets 44
Chapter 5: The value relevance of accounting information. 45
Chapter 6: The measurement approach to decision usefulness 45
Chapter 7: Principle Based Measurement 46
Chapter 8: The efficient contracting approach to decision usefulness & Chapter 9 Agency Conflicts 47
Chapter 10: Executive Compensation 49
Chapter 11: Earnings Management 51
Chapter 12: Standard Setting: Economic Issues 53
Chapter 13: Standard Setting: Political Issues 55
3
