The effects of cross-border cooperation on disclosure enforcement, earnings attributes, and transparency

This study tests for changes in U.S.-listed foreign firms' financial reporting properties and transparency when their home market regulators enter an arrangement that facilitates enforcement cooperation with the Securities and Exchange Commission. This arrange-ment-the International Organization of Securities Commissions' Multilateral Memorandum of Understanding Concerning Consultation and Cooperation and the Exchange of Information (MMoU)-has explicit disclosure-related provisions. I show that the MMoU is associated with improvements across various measures of accounting prop-erties and transparency. Collectively, the findings help resolve enduring questions about why the earnings quality of U.S.-listed foreign firms diverged from that of U.S. firms during pre-MMoU periods. (C) 2021 Elsevier Inc. All rights reserved.