In this paper, I draw parallels between the literatures on the effects of law on the financial development of countries and on the effects of accounting standards on financial reporting outcomes. My central thesis is that these literatures are complementary in terms of what they have to say about understanding the effects of law, regulations and accounting standards on economic and financial reporting outcomes. Moreover, both literatures suggest that U.S. securities laws and financial reporting standards have taken a more regulatory direction over time. I then take these themes and draw implications for the effects of the adoption of International Financial Reporting Standards (IFRS) around the world at the time of adoption and over time.

Robert W. Holthausen, Robert E. Verrecchia, The Effect of Sequential Information Releases on the Variance of Price Changes in an Intertemporal Multi-Asset Market, Journal of Accounting Research, Vol. 26, No. 1 (Spring, 1988), pp. 82-106

We assemble and describe a sample of 174,782 lawsuits filed against 218,437 public‐company lawsuit‐defendants in federal district court from 2006 to 2021. These lawsuits involve an array of allegations, including product liability, civil rights discrimination, contract breaches, improper compensation and labor practices, antitrust violations, corruption, securities violations, pollution, and intellectual property infringement. The sample exhibits rich variation across firms, industries, time, suit type, plaintiffs, and outcomes—reflecting not only firm activities but also social, political, and regulatory trends. Although many claims matter very little, some are important individually or in aggregate. We observe 23% of defendants experience a market value decline exceeding 10% of current assets around the lawsuit filing. Consistent with the notion that even low‐stakes claims, when numerous or persistent, can introduce frictions or reflect underlying issues, we find that aggregate legal exposure is associated with increased return volatility and decreased profitability. Subsequent tests indicate that materiality, public and private enforcement, and firms’ information environments (as well as other firm traits) are associated with managers’ decisions to disclose these claims. Collectively, our descriptive evidence establishes a foundation for further research into underexplored types of corporate litigation that represent a broad range of alleged wrongdoing and socially irresponsible behavior.