IDEAS home Printed from https://ideas.repec.org/a/eee/reacre/v29y2017i1p75-78.html
   My bibliography  Save this article

Learning from ecology: Financial reporting as a ‘commons’

Author

Listed:
  • King, Thomas A.

Abstract

This note explores how the financial reporting environment for listed companies is a common good put at risk by participants with incentives to extract benefits at the cost of the investing public. Disclosure of misleading financial information confers economic gain for a few but pollutes the environment and reduces its usefulness for all. After showing how a variant of the prisoner's dilemma may explain Enron-era scandals, the note discusses how U.S. government intervention was the only practical solution to repair damage to the financial reporting Commons. The implication of this note is that government involvement in financial reporting is here to stay.

Suggested Citation

  • King, Thomas A., 2017. "Learning from ecology: Financial reporting as a ‘commons’," Research in Accounting Regulation, Elsevier, vol. 29(1), pages 75-78.
    • Handle: RePEc:eee:reacre:v:29:y:2017:i:1:p:75-78
    DOI: 10.1016/j.racreg.2017.04.008
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1052045717300097
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.racreg.2017.04.008?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ron Kasznik & Maureen F. McNichols, 2002. "Does Meeting Earnings Expectations Matter? Evidence from Analyst Forecast Revisions and Share Prices," Journal of Accounting Research, Wiley Blackwell, vol. 40(3), pages 727-759, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Seok, Sang Ik & Cho, Hoon & Ryu, Doojin, 2020. "The information content of funds from operations and net income in real estate investment trusts," The North American Journal of Economics and Finance, Elsevier, vol. 51(C).
    2. Abhijit Barua & Joseph Legoria & Jacquelyn Sue Moffitt, 2006. "Accruals Management to Achieve Earnings Benchmarks: A Comparison of Pre‐managed Profit and Loss Firms," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 33(5‐6), pages 653-670, June.
    3. Enkeleda Lulaj & Etem Iseni, 2018. "Role of Analysis CVP (Cost-Volume-Profit) as Important Indicator for Planning and Making Decisions in the Business Environment," European Journal of Economics and Business Studies Articles, Revistia Research and Publishing, vol. 4, May - Aug.
    4. Brown, Stephen & Hillegeist, Stephen A. & Lo, Kin, 2009. "The effect of earnings surprises on information asymmetry," Journal of Accounting and Economics, Elsevier, vol. 47(3), pages 208-225, June.
    5. Kross, William J. & Ro, Byung T. & Suk, Inho, 2011. "Consistency in meeting or beating earnings expectations and management earnings forecasts," Journal of Accounting and Economics, Elsevier, vol. 51(1-2), pages 37-57, February.
    6. Levent Ataünal & Ali Osman Gürbüz & Asli Aybars, 2016. "Does High Growth Create Value for Shareholders? Evidence from S&P500 Firms," European Financial and Accounting Journal, Prague University of Economics and Business, vol. 2016(3), pages 25-38.
    7. Stephen Taylor & Alex Tong, 2020. "How efficient is the market for Australian firms’ earnings information?," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(4), pages 4225-4255, December.
    8. Khine Kyaw & Mojisola Olugbode & Barbara Petracci, 2020. "Is the market surprised by the surprise?," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 17(1), pages 20-29, March.
    9. Oleg V. Petrenko & Federico Aime & Tessa Recendes & Jeffrey A. Chandler, 2019. "The case for humble expectations: CEO humility and market performance," Strategic Management Journal, Wiley Blackwell, vol. 40(12), pages 1938-1964, December.
    10. Hribar, Paul & Jenkins, Nicole Thorne & Johnson, W. Bruce, 2006. "Stock repurchases as an earnings management device," Journal of Accounting and Economics, Elsevier, vol. 41(1-2), pages 3-27, April.
    11. Yashu Dong & Danqing Young & Yinglei Zhang, 2021. "Familiarity bias and earnings-based equity valuation," Review of Quantitative Finance and Accounting, Springer, vol. 57(2), pages 795-818, August.
    12. Neururer, Thaddeus, 2022. "Meet-or-beat streak heterogeneity and equity prices," The Quarterly Review of Economics and Finance, Elsevier, vol. 86(C), pages 455-470.
    13. Sherry Fang Li, 2023. "The Incidence Of Expectations Management In The Post-Regulation Fair Disclosure Period," Accounting & Taxation, The Institute for Business and Finance Research, vol. 15(1), pages 105-116.
    14. Sherry Fang Li, 2019. "Capital Market Consequences Of Expectations Management In The Postregulation Fair Disclosure Period," Accounting & Taxation, The Institute for Business and Finance Research, vol. 11(1), pages 11-20.
    15. Thaddeus Neururer & George Papadakis & Edward J. Riedl, 2020. "The Effect of Reporting Streaks on Ex Ante Uncertainty," Management Science, INFORMS, vol. 66(8), pages 3771-3787, August.
    16. Jerayr J. Haleblian & Michael D. Pfarrer & Jason T. Kiley, 2017. "High-Reputation Firms and Their Differential Acquisition Behaviors," Strategic Management Journal, Wiley Blackwell, vol. 38(11), pages 2237-2254, November.
    17. Bens, Daniel A. & Nagar, Venky & Skinner, Douglas J. & Wong, M. H. Franco, 2003. "Employee stock options, EPS dilution, and stock repurchases," Journal of Accounting and Economics, Elsevier, vol. 36(1-3), pages 51-90, December.
    18. Humeyra Adiguzel, 2013. "Corporate Governance, Family Ownership and Earnings Management: Emerging Market Evidence," Accounting and Finance Research, Sciedu Press, vol. 2(4), pages 1-17, November.
    19. Jörn Obermann, 2020. "Let’s talk about money! Assessing the link between firm performance and voluntary Say-on-Pay votes," Journal of Business Economics, Springer, vol. 90(1), pages 109-135, February.
    20. Johnson, Peter M. & Jurney, Susan & Rodgers, Theodore C., 2015. "How does the market process sequential earnings information?," Advances in accounting, Elsevier, vol. 31(1), pages 55-67.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:reacre:v:29:y:2017:i:1:p:75-78. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/research-in-accounting-regulation .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.