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Daniel A. Bens

Professor of Accounting and Control

Journal Article

Accounting Discretion: Use or Abuse? An Analysis of Restructuring Charges Surrounding Regulator Action

Bens D. A., Johnston R. (2009). Accounting Discretion: Use or Abuse? An Analysis of Restructuring Charges Surrounding Regulator Action Contemporary Accounting Research, 26(3), (pp673-699).

Accounting Discretion: Use or Abuse? An Analysis of Restructuring Charges Surrounding Regulator Action In this paper the authors examine whether restructuring charges, an accounting accrual for the estimated costs of programs to increase operational efficiency, are associated with indicators of earnings management, after controlling for economic fundamentals associated with the charge.

The authors study how these charges change through time following an Emerging Issues Task Force rule (EITF No. 94-3) of the Financial Accounting Standards Board (FASB) designed to standardize accounting for restructurings.

The authors also explore how the charges vary in time depending on the level of publicly revealed scrutiny by the Securities and Exchange Commission (SEC).

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