Sky Blog
In May 2026, the Securities and Exchange Commission (SEC) proposed letting public companies replace their three quarterly reports on Form 10-Q with a single semiannual report on a new Form 10-S. Quarterly reporting would remain the default, and each company …
In November 2024, the Financial Accounting Standards Board finalized its Disaggregation of Income Statement Expenses (DISE) standard. Beginning in 2028, public firms will have to break out employee compensation from each functional expense item on the face of their income …
Financial reporting is, at its core, an exercise in summarization. For example, the income statement condenses millions of transactions into only a handful of line items. This act is not merely convenient but necessary, since preparing and disclosing every underlying …
Governments sometimes use private ordering – the delegation of regulatory authority to the private sector – in regulating commerce, finance, and business more generally. In a new article, available here, I focus on one of the federal government’s most …
The federal securities laws establish the authority of the Securities and Exchange Commission (“SEC” or “Commission”) to set accounting, auditing, and auditor independence standards to be followed in the preparation and the audit of the financial statements of public companies. …
In recent years, public firms in the U.S. have increasingly issued revenue guidance that is not based on Generally Accepted Accounting Principles (GAAP). Instead, they have focused on customized, non-GAAP metrics such as “organic revenue” or “constant-currency revenue.” Non-GAAP revenue …
The system of disclosure for public companies no longer meets the needs of investors and other stakeholders. Largely put in place by the Securities and Exchange Commission in 1982, the principles underlying the system have failed to keep pace with …
Public companies face a wide range of legal claims, yet the Financial Accounting Standards Board (FASB) and the Securities and Exchange Commission (SEC) have questioned whether public companies provide sufficient disclosure to warn investors of potential losses from these claims. …
Controversy has persisted in recent decades over the accounting treatment of the vast sums expended on purchased goodwill – variously described as a “present-value estimate of future rents” from an acquisition or “the difference between what you pay [for an …
Over the past decade, ESG has morphed from a fringe concern into one of the most prominent topics in corporate governance – and a flourishing research area as well.[1] Nevertheless, some notable blindspots remain. Based on a recent survey, …
Critics of mandatory public disclosure often argue that it may put disclosing firms at a competitive disadvantage by requiring them to reveal potentially proprietary information to rivals. For instance, when the Financial Accounting Standards Board (FASB) proposed to mandate more …
Investors are flocking to companies with good environmental, social, and governance (ESG) scores and are threatening to shun companies with poor ones. For many investors, ESG scores are critical to a company’s long-term profitability, not to mention its impact on …
The Financial Accounting Standards Board (FASB) and the Securities Exchange Commission (SEC) (collectively, “regulators”) have expressed concern over “disclosure overload,” or the concern that the sheer volume of disclosure in annual reports makes it difficult for investors to identify and …
Related party transactions (RPTs) refer to a transfer of resources, services, or obligations between a reporting entity and a related party and usually offer insiders a way to expropriate wealth from other investors via self-dealing. Both the Financial Accounting Standards …
Existing research provides limited insight into what draws the attention of tax authorities to public information and how that information is used in the process of examining corporate tax positions. For publicly traded firms in the U.S., the Internal Revenue …
There is an extensive literature on the benefits of mandatory disclosure by firms, but measuring the costs of such disclosure has been more challenging (Leuz and Wysocki 2016). In particular, while some believe that mandatory disclosure could increase litigation against …
Thank you for the kind introduction. I’m grateful for the opportunity to speak at this financial reporting conference for the second time.
Before I continue, let me remind you that the views expressed today are my own and not necessarily …
Critics often argue that firms and financial standard setters fail to understand fully the implications of their corporate governance policies. The general belief is that stronger governance almost necessarily leads to better firm outcomes. This idea rests on the assumption …
The Financial Accounting Standards Board (the “Board”) recently issued two exposure drafts that recommend a series of amendments related to determinations of materiality.1 These efforts form part of the Board’s ongoing disclosure framework project, an initiative dedicated to improving …