Brian Bushee - Faculty Research in Knowledge@Wharton

Are 'Mark-to-market' Accounting Rules on the Mark?

Wed, 01 Apr 2009 17:13:39 EST

On April 2, the Financial Accounting Standards Board is expected to vote on a proposal to relax a standard at the heart of the financial crisis -- mark-to-market accounting rules that require toxic assets to be carried on companies' books at fire-sale prices, based on recent trades of similar assets for far less than they would command in normal times. Many big banks say the crisis has been made worse by these rules. Not everyone agrees.

How Investor Relations (IR) Firms Can Boost the Market Prospects of Small Companies

Wed, 06 Apr 2005 17:18:11 EST

Analysts at Wall Street brokerage firms who once tracked small companies in hopes of getting investment banking business cannot do that anymore due to conflict of interest issues. Companies, in turn, cannot favor selected analysts when they release corporate information. The end result is that smaller firms are having a harder time gaining analysts' attention. A new paper, co-authored by Wharton accounting professor Brian J. Bushee and Harvard Business School's Gregory S. Miller, suggests that firms can benefit from the expertise of outside investor relations (IR) consultants when it comes to attracting investors, improving the liquidity of their stock and reducing their future cost of capital.

Accounting Games Companies Play (Especially With Revenues and Costs)

Wed, 14 Jul 2004 15:04:47 EST

Last month the Securities and Exchange Commission charged Lucent Technologies with "fraudulently and improperly" recognizing more than $1 billion in revenues and $470 million in pre-tax income during fiscal 2000. In these post-Enron days of tougher financial accounting standards, what lessons can be learned from the situation that got Lucent into trouble? Accounting professors at Wharton and other experts say that it is crucial for companies to pay close attention to issues such as the proper way to recognize revenues and calculate expenses. Unless this is done right, it may not only attract regulatory action but also undermine relations with investors and partners.

How Foreign Firms Can Attract U.S. Investors: Overcoming 'Home Bias'

Wed, 03 Dec 2003 14:56:54 EST

Wharton accounting professor Brian Bushee remembers talking to the CFO of a large Australian consumer products company which was having trouble attracting interest from

U.S.

analysts and institutional investors. Part of the problem, the CFO had decided, was that his company chose to comply with Australian accounting methods rather than with U.S. GAAP (Generally Accepted Accounting Principles). His experience led Bushee and two colleagues to study whether foreign firms that use accounting methods consistent with U.S. GAAP are able to attract more

U.S.

institutional investors. The results of their research are in a new paper entitled, “Accounting Choice, Home Bias, and U.S. Investment in Non-U.S. firms.”

Do High Regulatory Costs Force Public Firms to Go Private?

Wed, 10 Sep 2003 00:00:00 EST

In these post-Enron days, strict regulatory measures like the Sarbanes-Oxley Act aim at restoring confidence in capital markets by requiring public companies to disclose detailed financial information to investors. But it turns out that public companies increasingly are deregistering -- or going private -- as a way to sidestep these requirements. Wharton accounting professors Brian J. Bushee and Christian Leuz say in a new research paper that high costs of regulatory compliance are driving this trend. The solution? Replace the present one-size-fits-all approach to regulation -- which places outsized economic burdens on small companies and startups -- with a more realistic, multi-tiered approach.

Coke, Quarterly Estimates and �The Numbers Game�

Wed, 29 Jan 2003 00:00:00 EST

When Coca-Cola announced in mid-December that it would end its long practice of making quarterly earnings forecasts, it looked like heresy. Practically all public companies participate in the ritual of earnings guidance. And in the post-Enron-WorldCom-Tyco era, regulators and investors are pressing for more financial disclosure, not less. What was behind Coke�s decision and is it one that other companies should emulate?

Do Layoffs Mean You Actually Lose Your Job?

Wed, 28 Mar 2001 00:00:00 EST

The unemployment rate announced last week for the month of March � 4.3% - was the highest in 20 months and the number of actual jobs lost � 86,000 - was the largest since November 1991. What�s behind the constant stream of layoff announcements, and is the employment picture as dire as media reports would have us believe?