The impact of increased disclosure requirements and the standardization of accounting practices on earnings management through the reserve for income taxes
We examine whether the regulatory changes required by the Sarbanes–Oxley Act of 2002 (SOX) and Financial Accounting Standards Board Interpretation No. (FIN) 48 reduced the propensity for earnings management through the reserve for income taxes. Given prior evidence that firms use this reserve to manage earnings to beat the consensus analyst forecast, the regulatory changes implemented by both SOX and FIN 48 allow us to study the effects of accounting regulation on earnings management. We find that neither SOX nor FIN 48 reduced earnings management through the reserve for income taxes. Thus, in contrast to research that examines whether SOX affected nontax, accrual-based earnings management, our results suggest managers continue to take advantage of their discretion over the accounting for income taxes to beat the consensus analyst forecast in both the post-SOX and post-FIN 48 periods.
Using data from 2004 SIPP, matched to job demands from O*Net, we provide new estimates of disability-related wage discrimination. We apply state-of-the-art econometric methods to wage models which include job demands and interactions between demands and functional limitations. The interaction terms are interpreted as measures of how well disabled workers ?match? to jobs which minimize the effects of functional limitations. The results suggest traditional discrimination models underestimate potential effects of disability-related discrimination by penalizing workers for limitations which may not affect their job performance. The bias is greater for men, who generally appear to find better matches than do women.