Financial reporting changes and internal information environment: Evidence from SFAS 142

• Main Authors: CHENG, Qiang, CHO, Young Jun, YANG, Holly I.
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2018
• Subjects: Financial reporting changes; internal information environment; SFAS 142; management forecasts; goodwill; Accounting; Corporate Finance
• Online Access: https://ink.library.smu.edu.sg/soa_research/1768; https://ink.library.smu.edu.sg/context/soa_research/article/2795/viewcontent/FinRepChanges_Internal_InfoEnvironment_2017_pp.pdf
• Institution: Singapore Management University

Using the adoption of SFAS 142 as an exogenous shock, we examine the effect of changes in financial reporting on firms’ internal information environment. SFAS 142 removed goodwill amortization and required firms to perform a two-step impairment test. We argue that complying with SFAS 142 induces man...