As technology becomes more complex, business transactions and accounting standards both become more complex. But do accounting standards need to match the complexity of business transactions? Rusli, Zhao and Ziebart find that accounting standards can be simpler if they rely on market-established prices of relevant assets.
How do corporations—who balance making sales today and planning for the future—respond to regulatory change? Thomaz, Bargeron, Hulland, and Zutter’s study provides evidence that legislative changes, such as Sarbanes-Oxley, can significantly affect a corporation’s priorities. The passage of Sarbanes-Oxley incentivized U.S. corporations to focus more on reaping the immediate gains from marketing rather than investment in research and development.