Accounting complexity, misreporting, and the consequences of misreporting

• 成果类型: Article
• 署名作者: Peterson, Kyle
• 署名单位: University of Oregon
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-011-9164-5
• 发表日期: 2012
• 页码: 72-95
• 关键词: market reactions; earnings; incentives; RESTATEMENTS; FRAUD

摘要

I examine whether accounting complexity in the area of revenue recognition increases the probability of restating reported revenue. I measure revenue recognition complexity using the number of words and recognition methods from the revenue recognition disclosure in the 10-K and a factor score based on the number of words and methods. Tests reveal that revenue recognition complexity increases the probability of revenue restatements, and these restatements are the result of both intentional and unintentional misreporting. Furthermore, complexity moderates the consequences of restatement-lower incidence of AAERs, less negative restatement announcement returns, and lower subsequent CEO turnover-suggesting that stakeholders of the firm consider accounting complexity when responding to misreporting.