SEC supervisory activity in the financial industry

Angela Kate Pettinicchio, Angela Pettinicchio

Risultato della ricerca: Contributo in rivistaArticolo in rivista

Abstract

This study documents a higher incidence of SEC Comment Letters among financial institutions characterized by abnormal levels of loan loss provisions (LLPs). In particular, results show that this effect is stronger for banks overestimating LLPs, suggesting an asymmetric attitude of the SEC Research Division toward overestimations compared with LLPs underestimations, especially in the pre-financial crisis period. Finally, the study demonstrates that after receiving a Comment Letter by the SEC, financial institutions change the way they account for LLPs by basing their computation more on historical data, thereby reducing the level of discretion embedded in their calculation
Lingua originaleEnglish
pagine (da-a)607-636
Numero di pagine30
RivistaJOURNAL OF ACCOUNTING AUDITING & FINANCE
Volume35
DOI
Stato di pubblicazionePubblicato - 2020

Keywords

  • ABNORMAL LOAN LOSS PROVISIONS
  • FINANCIAL INDUSTRY
  • SEC SUPERVISION

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