The Incremental Information Content of \u3cem\u3eSAS No. 59\u3c/em\u3e Going-Concern Opinions

The purpose of this paper is to evaluate whether the expanded requirements of SAS No. 59 (A/CPA [1988]), which requires auditors to actively evaluate and report on a client\u27s going-concern status for the coming year, have allowed investors to make more accurate ex ante assessments of firms that eventually file for bankruptcy. We extend Chen and Church [1996] (hereafter CC), who conclude that SAS No. 34 (AICPA [1981]) subject to going-concern opinions have information value because they reduce the surprise associated with bankruptcy announcements. We hypothesize that if SAS No. 59 has achieved what was intended, going-concern opinions issued under SAS No. 59 should further reduce investor surprise at bankruptcy announcements. While we do not believe SAS No. 59 was issued for the specific purpose of helping users to predict bankruptcy, we do suggest that the increased auditor responsibility and improved communication should provide users with information that is of relatively higher quality. This argument is based on a number of important differences between SAS No. 34 and SAS No. 59

Mentoring Ph.D. Students Into Effective Teaching And Service: Challenges And Opportunities

This article presents an overview and analysis of a set of papers that respond to a call for papers addressing the skills, other than those required for conducting research, that are critical for the professional success of doctoral students in accounting. While research proficiency is a key success factor for doctoral students at all types of institutions, long-term career success also requires proficiency in teaching and in related service areas such as performing peer-reviews of other scholars’ work for journals and conferences. Three of the articles in this volume discuss programs that can be used to improve the teaching skills and effectiveness of doctoral students and fledgling faculty. Two of the articles in this volume address the skills required for improving the general body of research, and personal visibility within the profession, through discussing and reviewing papers. The final paper in the volume deals with how to manage the publication process, and contains valuable advice intended to prevent new faculty from abandoning publication efforts prematurely. We believe that the body of work represented in this volume will add value to doctoral education by supplementing the existing focus on performing research with the additional skills commonly required of members of the accounting academy

Corporate Disclosure of the Decision to Change the Fiscal Year-End

This paper investigates whether registrants comply with SEC rules designed to provide timely notification and transparent disclosure of the effects of a change in fiscal year-end. For a sample of 79 firms, the Form 8-K announcement of the change was filed late 25% of the time and no announcement was available for an additional 14% of the firms. In the subsequent Form 10-K, roughly half of the firms did not report operating results for both the transition period and a comparative period from the prior year, as required by the SEC. The rate of non-compliance was higher for firms audited by non-Big-6 firms. Non-compliance is more important if poor disclosure occurs in conjunction with income management. In this regard, we found an unusually high frequency of losses reported in the transition period that results from a fiscal year change (relative both to the firms\u27 prior experience and to other COMPUSTAT firms)

The Association between Disclosure, Distress, and Failure

ethics, disclosure, Management Discussion and Analysis (MD&A), distress,

The Performance Consequences of Operational Restructurings

This study provides new evidence on the long-term performance effects of operational restructurings. While managers claim that restructurings increase the efficiency and profitability of companies, prior studies using accounting data have reached mixed conclusions regarding the post-restructuring operational effectiveness of these events. Using metrics that provide control for firm and industry performance in the absence of restructuring, and examining a time horizon extending five years subsequent to the restructuring, our results are not consistent with an improvement in operating performance resulting from restructuring after controlling for ex ante expectations of firm and industry performance. Copyright Springer Science + Business Media, Inc. 2005restructuring, operating performance, operational restructurings,