Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 1 of 1
Full-Text Articles in Business
How Does The Nature Of Accounting Standards Affect Audit Quality And Earnings Attributes?, Ran Ling
How Does The Nature Of Accounting Standards Affect Audit Quality And Earnings Attributes?, Ran Ling
FIU Electronic Theses and Dissertations
The purpose of this study is to provide evidence on the effects of the nature of accounting standards (i.e. principles- versus rules-based accounting standards) on audit quality and earnings attributes. I construct a comprehensive instrument to effectively measure rules-based characteristics in the U.S. GAAP following Mergenthaler (2011). I then construct a firm-level instrument to capture firms' reliance on principles-based accounting standards using the textual analysis approach developed by Folsom et al. (2017). Using data from S&P 500 companies during 2009-2014, I first examine whether principles- (or rules-) based standards in the FASB Accounting Standards Codification (ASC) system affect both the …