Sky Blog
A host of studies have examined the link between accounting and the 2007-2008 global financial crisis, most of them focusing on whether fair value accounting or accounting discretion at financial institutions helped skew valuations on bank balance sheets. In our …
On July 13, the Securities and Exchange Commission issued a proposal aimed at eliminating or updating duplicative, overlapping and obsolete disclosure requirements. The proposal is welcome, but largely technical in nature and generally focused on duplicative requirements. As a result, …
In the wake of its release on May 17, 2016 of updated Compliance and Disclosure Interpretations (“CDIs”) relating to the disclosure of non-GAAP financial measures, the SEC’s Division of Corporation Finance has indicated in no uncertain terms that now is …
On May 17, 2016, the Division of Corporation Finance of the Securities and Exchange Commission (the “SEC”) released new and updated Compliance and Disclosure Interpretations (“C&DIs”) on the use of non-GAAP financial measures (“NGFMs”). The release of the C&DIs follows …
Effective corporate governance relies on models—business models, financial models, and risk models, among many others—the primary fuel for which is timely, reliable information. In this connection, statistics luminary George Box famously wrote, “Remember that all models are wrong; the practical …
Last year, the Securities and Exchange Commission (SEC) made major progress in completing its rulemaking mandates under the Jumpstart Our Business Startups Act (JOBS Act) and the Dodd-Frank Act. Additionally, Congress enacted the Fixing America’s Surface Transportation Act (FAST Act), …
Section 404 of the Sarbanes-Oxley Act of 2002 (SOX 404 hereafter) and the associated implementation guidance require firms’ management and independent financial statement auditor to formally document, test, and report publicly in the annual Form 10-K on the effectiveness of …
The Sarbanes-Oxley Act of 2002 (SOX) requires management and auditors to opine on the effectiveness of internal controls for many public companies. One intention of SOX is to improve the reliability of information public companies provide to the financial markets …
One of the primary purposes of financial statements is to facilitate the exchange of capital between investors and companies. The extent to which investors rely on the information reported in financial statements depends on the credibility of those financial statements …
Any successful fraudster can tell you the golden rule of his trade: if no one notices your fraud, keep doing it. The possibility to repeat past success makes fraud very costly: for example, health care fraud accounts for one to …
Washington is a strange town! The more you succeed, the more you attract enemies. If you outperform all prior occupants of your office, behave like a model gentleman, and achieve what no one thought possible, that will make you a …
Not surprisingly, cognitive abilities predict many economic and social outcomes such as salary, job complexity, or success in investment decisions. What is surprising, however, is that almost all auditing research analyzing archival data on audit outcomes has assumed that all …
“I am raising the question here and internally at the SEC as to whether investors need and are optimally served by the detailed and lengthy disclosures about all of the topics that companies currently provide in the reports they are …
Corporate accounting standards are an important basis for the measurement of firm and managerial performance and for the stewardship of corporate assets in a market economy. Understanding the process that culminates with the creation of accounting standards can provide insights …