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Essay text:
THORNTON,
Queen’s University
ABSTRACT
We provide preliminary evidence, consistent with Skinner (1995), that Canada’s relatively
principles-based GAAP yield higher accrual quality than the United States’ relatively rulesbased
GAAP. These results stem from a comparison of the Dechow-Dichev (2002) measure
of accrual quality for cross-listed Canadian firms reporting under both Canadian and U.S.
GAAP. However, we document lower accrual quality for Canadian firms reporting under
U.S. GAAP than for U.S. firms, which are subject to stronger U.S. oversight, reporting
under U.S. GAAP. The latter results suggest that stronger U...

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