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 language | English (US) |
---|---|
Pages (from-to) | 77-94 |
Number of pages | 18 |
Journal | Journal of Accounting and Economics |
Volume | 51 |
Issue number | 1-2 |
DOIs | |
State | Published - Feb 1 2011 |
Externally published | Yes |
Keywords
- Earnings management
- Employee stock options
- Fair value
- Recognition versus disclosure
ASJC Scopus subject areas
- Accounting
- Finance
- Economics and Econometrics