Abstract
This book comprises four papers with a shared objective: to deepen our understanding of the effect of financial accounting and disclosure regulations on corporate disclosure practices and, by extension, the behavior and decisions of market participants.
The primary objective of financial reporting and disclosure regulation is to enhance the information environment by influencing firms’ reporting and disclosure practices. On the information effect side, the first and second papers in this book examine how new financial accounting standards alter corporate disclosure practices and the implications for information users. Subsequently, the third paper investigates the role of financial auditors—key enforcers of reporting regulations—in utilizing information from industry specialists to enhance audit outcomes.
Going beyond the information effects on users, a burgeoning group of accounting research delves into the extent to which financial reporting and disclosure contribute to the allocation of capital within a firm and influence corporate decisions. On the real effect side, the fourth paper examines the role of financial analysts as information intermediaries in transmitting the real effect of mandatory disclosure regulations concerning firms’ corporate social responsibility practices.