Academic

Welcome back to the fourth day of the Fourth Annual Conglomerate Junior Scholars Workshop.  Today's author is James Park, an assistant professor at Brooklyn Law School, where he teaches securities regulation, corporations, corporate finance and civil procedure.  His research so far has focused on securities law, including this paper, which has been accepted by the Journal of Corporation Law, Assessing Materiality of Financial Misstatements:

While markets rely on accurate financial reports in valuing companies, it can be difficult to interpret vague accounting rules. Federal securities law thus makes liability for financial misstatements contingent on a showing of materiality. There are two competing approaches to assessing the materiality of a financial misstatement. First, there is a quantitative approach, where a misstatement can only be material if it is above a bright-line threshold - often 5 percent of net income. Second, there is a qualitative approach, where a misstatement under the 5 percent threshold can still be material if it allows a company to meet its earnings forecasts or results in management bonuses.

Today we have a nonembarassment of riches with a star-studded lineup of commentators and past workshop participants: Adam Pritchard, Larry Cunningham, Joan Heminway, Elizabeth Nowicki, Dave Hoffman and Michael Guttentag. Our own Fred Tung is also waiting in the wings with some thoughts.