Recognition versus Disclosure and Audit Fees and Costs: Evidence from Pension Accounting in Japan

被引:2
作者
Kusano, Masaki [1 ]
Sakuma, Yoshihiro [2 ]
机构
[1] Kyoto Univ, Grad Sch Econ, Kyoto, Japan
[2] Tohoku Gakuin Univ, Fac Business Adm, Sendai, Miyagi, Japan
基金
日本学术振兴会;
关键词
recognition versus disclosure; pension accounting; audit fees; audit costs; EARNINGS MANAGEMENT EVIDENCE; BUSINESS RISK; VALUE-RELEVANCE; FAIR-VALUE; LITIGATION RISK; MANAGERIAL DISCRETION; OPERATING LEASES; FINANCE LEASES; MARKET; MANIPULATION;
D O I
10.2308/JIAR-19-082
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
Statement No. 26, Accounting Standard for Retirement Benefits, requires Japanese firms to recognize previously off-balance sheet pension liabilities on their balance sheets. We explore auditors' responses to recognized versus disclosed pension liabilities in the Japanese audit market. We use a pre-Statement No. 26 versus post-Statement No. 26 setting to analyze whether and how disclosed versus recognized pension information affects audit fees and costs. We show that disclosed pension liabilities are processed similarly to recognized previously offbalance sheet pension liabilities when audit fees are determined. However, we find that associations with audit costs differ between disclosed and recognized pension liabilities. We also find that audit costs' differential relations with disclosed and recognized pension liabilities are particularly pronounced for firms with a large pension plan deficit. Overall, our results suggest that auditors scrutinize recognized amounts more closely than disclosed financial information, thereby increasing the reliability of accounting information.
引用
收藏
页码:133 / 160
页数:28
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