In 1978, the Securities and Exchange Commission issued its final requirements concerning the disclosure requirements of companies that change their auditors. Along with a filing requirement for an auditor change, companies were also required to enumerate and describe disagreements they may have had with their CPAs on accounting and auditing issues in the 18 months prior to the change. To provide evidence on the existence and degree of market impact of these disclosure requirements, the behavior of stock prices of a sample of companies that switched auditors and a matched pair of control companies that did not were analyzed. Results of the study appear to be inconsistent with the SEC requirement for companies to enumerate and describe disagreements with their auditors. For the general event of auditor changes, there seems to be negative market reaction around the time of the switch; however, there is some difficulty in interpreting the motivation for this reaction.

The issue of interim reports is once again under consideration by the accounting profession. In its Discussion Memorandum, the FASB describes three major methods for interim reporting--the integral, the discrete, and the combination. The Board refers to the combination method as the one which combines the advantages of both the integral and discrete methods. Specifying three different objectives of interim reporting and using differing assumptions about the forecasting ability of management, this study examines the conditions under which the Board's assumption might hold true. In doing so, however, it is also shown that there exist conditions wherein one of the other methods would always be preferred. The paper concludes with a suggestion which, if implemented, could result in the combination method being preferred.