Principal-versus-Agent Considerations in Revenue Recognition Under ASC 606 and Compliance Risk

• 成果类型: Article
• 署名作者: Du, Kai; Louis, Henock; Schmidt, Brent A.; Wang, Shuyang
• 署名单位: Pennsylvania Commonwealth System of Higher Education (PCSHE); Pennsylvania State University; Pennsylvania State University - University Park; Northeastern University
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826; 1558-7967
• DOI: 10.2308/TAR-2022-0298
• 发表日期: 2026-05
• 页码: 467-492
• 关键词: revenue recognition; principal-versus-agent considerations; ASC 606; compliance risk; Information processing; FIRMS; disclosure

摘要

Using a dataset constructed through textual analysis and manual data collection, we show that, prior to ASC 606, firms with principal-versus-agent (PA) exposure face heightened GAAP compliance risk, reflected in a greater likelihood of receiving revenue-related SEC comment letters and higher audit fees. Following the adoption of ASC 606, these differences decline, consistent with the standard's stated goal of simplifying PA assessments and reducing implementation challenges. Overall, our findings provide the first large-sample evidence on PA considerations and show that ASC 606 mitigates compliance risk, although further analyses suggest additional disclosure may be needed to mitigate information challenges associated with PA assessments.