Columbia Law School
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I’m grateful for the opportunity to visit Baruch College’s Zicklin School of Business and speak at the annual financial reporting conference for the fourth time. Many students who were starting their collegiate work here when I first spoke at this
financial reporting
The Quality of Integrated Reporting Around the World
Integrated reporting is a business process that culminates in the publication of a report that explains how an organization creates value over the short-, medium-, and long-term. In terms of content and time horizon, an integrated report is similar to …
Double Trouble: An Analysis of IRS Attention and Financial Reporting
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 …
What Really Drives “Short-Termism”?
Earlier this month, the CEO of Pepsi Co. suggested to President Trump that eliminating quarterly reporting (and shifting to biannual reporting) would reduce the pressure on managers to focus on the short-term. As impulsive as Elon Musk, the president bought …
Quarterly Reporting and Market Liquidity
Trading in U.S. equity markets is fast and cheap. While proponents of ending quarterly reporting point to the dangers of short-termism, less frequent disclosure is also likely to lead to a decline in liquidity and to greater trading costs. The …
The Power of Words: How SEC Comment Letters to Foreign Issuers Affect the Capital Markets
In our recent paper, we find that the tone of language in Securities and Exchange Commission (SEC) comment letters after enforcement reviews has capital market implications, which are amplified or abbreviated based on the strength of a given country’s enforcement.…
The Consequences of Strong v. Weak Clawback Provisions
Clawback provisions authorize firms to recoup compensation from executives upon the occurrence of financial restatements or executive misbehavior. The first clawback provision in U.S. federal law was Section 304 of the Sarbanes-Oxley Act of 2002 (SOX 304). SOX 304 requires …
The Consequences of Restatements for Outside Directors
Serving on a public company’s board of directors carries responsibilities and risks as well as benefits for directors. If directors do not carry out their duties effectively, they risk damaging their reputation, losing their board seats, and facing shareholder lawsuits. …
SEC Adopts New Requirements on Using XBRL Reporting Language for Financial Statements
The Securities and Exchange Commission voted on June 28, 2018, to adopt amendments to eXtensible Business Reporting Language (XBRL) requirements for operating companies and funds. The amendments are intended to improve the quality and accessibility of XBRL data.
The amendments,
Financial Misreporting: Hiding in the Shadows or in Plain Sight?
It’s widely assumed that executives are less likely to inflate earnings at high profile companies under a good deal of regulatory oversight. And yet it’s also widely known that managers in high profile companies have an incentive to overstate their …
SEC Chief Accountant Talks Financial Reporting and Innovation
Thank you, Robert [Hodgkinson] for the kind introduction. Thank you, also, to the Institute of Chartered Accountants in England and Wales (“ICAEW”) for sponsoring this event. I am delighted to be in London and with you this afternoon. London continues …
Gibson Dunn Discusses SIFMA Report on Helping More Companies Go and Stay Public
On April 27, 2018, the Securities Industry and Financial Markets Association (“SIFMA”), the leading industry group representing broker-dealers, banks and asset managers, along with other securities industry related groups, released a report called “Expanding the On-Ramp: Recommendations to Help More …
Meaningful Ways to Measure Organizational Performance
A key principle of financial reporting is that “information should be expressed so that substance, not form, governs” [1]. What this means is that “the financial statements and accompanying disclosures of a business should reflect the underlying realities of business …
Whistleblower Provisions of Dodd-Frank Deter Aggressive Financial Reporting
In 2011, the Securities and Exchange Commission (SEC) introduced a Whistleblower (WB) program as part of the Dodd-Frank Act to protect investors through greater deterrence of securities law violations and more effective enforcement. The program offers financial incentives to provide …
Financial Reporting Choices of Large Private Firms
In recent years, there has been an increase in the number of firms opting to either forgo the public equity market or exit the market in favor of private financing.[1] Increasingly, financing for private firms comes from private funds, …
The Economics of Disclosure and Financial Reporting Regulation
Disclosure and reporting regulation is a central and recurring policy issue that has received significant attention in academic research on accounting, finance, and economics. Further fueling demand for this research are increasingly frequent requests that policy makers and regulators conduct …
How Effective Is the SEC in Identifying Financial Reporting Errors?
The Securities and Exchange Commission (SEC) Division of Corporate Finance (DCF) reviews and regulates information in public filings to “deter fraud and facilitate investor access to information necessary to make informed investment decisions.”
Commentators criticize the SEC for …
How Corporate Social Responsibility Affects Audit Fees
The past two decades have witnessed a dramatic increase in firms’ engagement with Corporate Social Responsibility (CSR) in response to the needs and expectations of a wide range of stakeholders. CSR practices can be understood as voluntary steps to improve …
SEC Discusses Advancing the Capital Markets with High-Quality Information
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 …
Weak Corporate Culture Creates Risk of Inaccurate Financial Reporting
After almost every major financial-reporting scandal, news stories and congressional speeches inevitably follow, detailing how corporate culture encouraged and enabled fraud. For example, in September 2016, Wells Fargo CEO John Stumpf testified before the House Financial Services Committee regarding the