Voluntary changes in accounting principle: Literature review, descriptive data, and opportunities for future research
Marsha B. Keune,
Timothy M. Keune and
Linda A. Quick
Journal of Accounting Literature, 2017, vol. 39, issue C, 52-81
Voluntary changes in accounting principle represent explicit and fundamental decisions by managers to exercise accounting discretion. This paper develops an organizing framework to review prior literature on voluntary changes, provides descriptive insights on contemporary changes, and identifies opportunities for future research on voluntary changes. The voluntary change literature is robust and has examined many questions using data prior to the Sarbanes-Oxley Act of 2002 (SOX). We find that contemporary voluntary changes often vary across the pre-SOX, post-SOX, and post-SFAS No. 154 periods by the materiality of their income effect, issue type, and justifications provided by managers, suggesting that manager use of voluntary changes has evolved over time. Our future research opportunities consider potential determinants of voluntary changes including strategic incentives, environmental conditions, and manager characteristics, as well as the potential direct or moderating role of corporate governance and auditors on manager use of voluntary changes. They also consider user reactions to voluntary changes. By providing insight into both extant voluntary change research and the contemporary use of voluntary changes, our study informs standards setters who grant managers the ability to exercise this form of accounting discretion, as well as researchers who plan to study accounting choice through voluntary changes.
Keywords: Voluntary changes; Accounting standards; Auditor-client interactions (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:joacli:v:39:y:2017:i:c:p:52-81
Access Statistics for this article
Journal of Accounting Literature is currently edited by S. Asare and W. R. Knechel
More articles in Journal of Accounting Literature from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().