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One purpose of accounting education is to introduce students to the values and ethical standards of the accounting profession (AAA Bedford Committee Report 1986). This study investigates whether undergraduate accounting education is successful at instilling in accounting students a sense of responsibility to financial statement users. In a longitudinal study of accounting and other business students, we find that accounting students oppose earnings management more strongly during their senior year than they did during their sophomore year. We also find that senior accounting students oppose earnings management more strongly than do senior students in other business disciplines. These results are consistent with a socialization process taking place wherein accounting students learn to give priority to financial statement users' needs, while students majoring in other business disciplines come to identify more closely with the goals of corporate managers.

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This paper examines investors' anticipation and subsequent interpretations of asset write-downs accompanying segment divestitures. Examining long-window returns cumulated over the two years preceding the year of divestiture, we hypothesize and find that investors anticipate write-downs of segment operating assets before divestiture and recognition occurs, with anticipation conditional on the timeliness of the write-down and prior disclosure of the segments' operating results under segment reporting rules. Short-window returns cumulated over the three days surrounding the announcement of the divestiture confirm that investor interpretations of asset write-downs are similarly contingent on write-down timeliness and prior disclosure. Copyright Blackwell Publishers Ltd, 2004.