ABSTRACT Despite the considerable participation of Big 4 accounting firms in accounting standard setting, there is no systematic evidence on what factors shape Big 4 support or opposition toward proposed accounting standards or whether their lobbying positions materially influence standards. Using textual features of Big 4 comment letters on FASB proposals, I find that Big 4 firms' lobbying positions reflect profit motives through support for standards that will generate more fees or are supported by their clients. Big 4 lobbying support is concentrated in proposals exhibiting both characteristics, with some evidence suggesting client agreement dominates fee-generating incentives. Big 4 lobbying positions are significantly associated with standard setting outcomes, both in isolation and relative to other FASB constituents, including financial statement users. Although I primarily focus on Big 4 accounting firms, results indicate the tone of comment letters submitted by users is unassociated with the standard setting outcomes measured in this study. Data Availability: All data are publicly available from the sources indicated. JEL Classifications: M41; M42.

Abstract The IASB asserts that global stakeholder participation in the standard‐setting process is critical for developing and maintaining high‐quality accounting standards. However, the myriad languages used in countries that apply IFRS may impede this participation. We find that the IASB is less likely to receive comment letters from stakeholders in countries with languages that are linguistically distant from English. We also find that comment letters from more linguistically distant stakeholders are less likely to be quoted in IASB staff‐prepared comment letter summaries, suggesting that they have less influence in the redeliberation process. Path analyses show that this result arises from language frictions being associated with reduced writing quality and originality. We also find that language frictions prevent participation in other standard‐setting communication channels. Collectively, language frictions appear to impede the IASB's efforts to equitably obtain and consider valuable global feedback.

Abstract Critics assert that securities class actions are economically burdensome and yield minimal recoveries, whereas proponents claim they deter wrongdoing. We examine key events in the recent Goldman Sachs Supreme Court case to test the net effect of securities litigation risk on shareholder value. We find that investors view securities class actions as value‐increasing. However, the strength of this effect varies based on external monitoring. Investors view securities class actions as more value‐enhancing when institutional ownership is low. We also use this setting to examine the effect of securities litigation risk on mandatory disclosure because the Goldman Sachs case focuses on mandatory disclosure properties. Using a difference‐in‐differences design, we find firm risk factor disclosures become shorter and less similar to industry peers, and they contain more uncertain and weak terms. Overall, our results show nuanced effects of securities litigation risk on shareholder value and firm disclosure.