Evidence on differences between recognition and disclosure: A comparison of inputs to estimate fair values of employee stock options

Research output: Contribution to journalArticle

36 Scopus citations

Abstract

I investigate reliability differences across recognition and disclosure regimes to shed light on differing incentives and reporting of employee stock option (ESO) fair values. I compare ESO fair values based on firm-reported inputs with ESO fair values based on benchmark inputs, estimated following authoritative guidance. On average, I find opportunism increases with recognition as compared with disclosure, and that it is associated with incentives to manage earnings. Despite the increase in opportunism, I find that accuracy does not decline for recognizers, and that accuracy differs across voluntary and mandatory recognition.

Original languageEnglish (US)
Pages (from-to)77-94
Number of pages18
JournalJournal of Accounting and Economics
Volume51
Issue number1-2
DOIs
StatePublished - Feb 1 2011
Externally publishedYes

Keywords

  • Earnings management
  • Employee stock options
  • Fair value
  • Recognition versus disclosure

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

Fingerprint Dive into the research topics of 'Evidence on differences between recognition and disclosure: A comparison of inputs to estimate fair values of employee stock options'. Together they form a unique fingerprint.

  • Cite this