TY  - GEN
AB  - I show that the issuance of a new accounting standard disrupts the cycle of consistency within accounting organizations, leading to improved accounting information. For the recent FASB Revenue Recognition and Leases standards, I show they lead to more error disclosures and more updates to legacy policies within the standards’ topic areas before the accounting standard change is implemented. I do not find a difference in the effects between firms more or less affected by a standard, consistent with the standards being broadly disruptive for all firms. However, I do find stronger effects for more decentralized firms following the Leases standard, implying a mechanism of the disruption: a centralized standard implementation effort that unifies historically dispersed accounting practices. I further demonstrate that the policy updates identified following the disruption result in improvements to accounting information. My results show that accounting standard-setting activity affects financial reporting processes and outcomes even prior to the adoption of the standard in a way that is distinct from the effects of the actual changes in accounting guidance.
AD  - University of Chicago
AU  - Khrakovsky, Maria
DA  - 2025-03
DO  - 10.6082/uchicago.14458
DO  - doi
ED  - Philip Berger
ED  - Hans Christensen
ED  - Michael Minnis
ED  - Charles McClure
ID  - 14458
KW  - GAAP
KW  - financial reporting
KW  - accounting standards
KW  - organizational inertia
L1  - https://knowledge.uchicago.edu/record/14458/files/Khrakovsky%20Chicago%20Dissertation%20OFFICIAL.pdf
L1  - https://knowledge.uchicago.edu/record/14458/files/MK_ApprovalForm_Wint25.pdf
L2  - https://knowledge.uchicago.edu/record/14458/files/Khrakovsky%20Chicago%20Dissertation%20OFFICIAL.pdf
L2  - https://knowledge.uchicago.edu/record/14458/files/MK_ApprovalForm_Wint25.pdf
L4  - https://knowledge.uchicago.edu/record/14458/files/Khrakovsky%20Chicago%20Dissertation%20OFFICIAL.pdf
L4  - https://knowledge.uchicago.edu/record/14458/files/MK_ApprovalForm_Wint25.pdf
LA  - eng
LK  - https://knowledge.uchicago.edu/record/14458/files/Khrakovsky%20Chicago%20Dissertation%20OFFICIAL.pdf
LK  - https://knowledge.uchicago.edu/record/14458/files/MK_ApprovalForm_Wint25.pdf
N2  - I show that the issuance of a new accounting standard disrupts the cycle of consistency within accounting organizations, leading to improved accounting information. For the recent FASB Revenue Recognition and Leases standards, I show they lead to more error disclosures and more updates to legacy policies within the standards’ topic areas before the accounting standard change is implemented. I do not find a difference in the effects between firms more or less affected by a standard, consistent with the standards being broadly disruptive for all firms. However, I do find stronger effects for more decentralized firms following the Leases standard, implying a mechanism of the disruption: a centralized standard implementation effort that unifies historically dispersed accounting practices. I further demonstrate that the policy updates identified following the disruption result in improvements to accounting information. My results show that accounting standard-setting activity affects financial reporting processes and outcomes even prior to the adoption of the standard in a way that is distinct from the effects of the actual changes in accounting guidance.
PB  - University of Chicago
PY  - 2025-03
T1  - Disrupting Consistency in Accounting
TI  - Disrupting Consistency in Accounting
UR  - https://knowledge.uchicago.edu/record/14458/files/Khrakovsky%20Chicago%20Dissertation%20OFFICIAL.pdf
UR  - https://knowledge.uchicago.edu/record/14458/files/MK_ApprovalForm_Wint25.pdf
Y1  - 2025-03
ER  -