Private Litigation as a Regulator of Accounting Standards
| dc.contributor.advisor | Davis, Angela | |
| dc.contributor.author | Cutler, Joshua | |
| dc.date.accessioned | 2015-08-18T23:00:01Z | |
| dc.date.available | 2015-08-18T23:00:01Z | |
| dc.date.issued | 2015-08-18 | |
| dc.description.abstract | I examine the impact of the trend of private class actions targeting alleged violations of generally accepted accounting principles (GAAP). I document the specific allegations in GAAP lawsuits and find that allegations involving revenue recognition and asset impairment recognition are two of the most common areas of GAAP cited. I test whether lawsuits lead to a reduction in the allegedly improper behavior, whether sued firms and their peers make other financial reporting changes, and whether these changes change firms’ stock price characteristics. I find that following relevant lawsuits, sued firms, firms in the same industry, and firms with a shared auditor generally exhibit less aggressive revenue recognition, but firms may increase aggressive revenue recognition in certain cases. Next, I examine the impact of asset impairment recognition allegations on the reporting of negative special items. I find few changes directly associated with these allegations but show that other litigation is associated with both increases and decreases in the propensity and size of negative special item reporting. I note that GAAP violations most often arise in an attempt to meet or beat analysts’ estimates, and I show following litigation firms are often more likely to beat analysts’ expectations by a larger margin. I also find significant increases in real earnings management of sued firms and their peers following many lawsuits, indicating a shift away from accruals-based management towards real activities management. Finally, I find mixed evidence of changes in stock return attributes. In some cases I observe significant changes consistent with reduced litigation risk and in others I observe the opposite. The results have implications for accounting standard setting and show that the legal system plays a critical role in shaping the financial reporting environment. | en_US |
| dc.identifier.uri | https://hdl.handle.net/1794/19230 | |
| dc.language.iso | en_US | |
| dc.publisher | University of Oregon | |
| dc.rights | All Rights Reserved. | |
| dc.subject | Class actions | en_US |
| dc.subject | Financial reporting | en_US |
| dc.subject | GAAP | en_US |
| dc.subject | Litigation | en_US |
| dc.subject | Securities regulation | en_US |
| dc.title | Private Litigation as a Regulator of Accounting Standards | |
| dc.type | Electronic Thesis or Dissertation | |
| thesis.degree.discipline | Department of Accounting | |
| thesis.degree.grantor | University of Oregon | |
| thesis.degree.level | doctoral | |
| thesis.degree.name | Ph.D. |
Files
Original bundle
1 - 1 of 1
Loading...
- Name:
- Cutler_oregon_0171A_11240.pdf
- Size:
- 585.59 KB
- Format:
- Adobe Portable Document Format