Financial support has been provided by the Accounting Development Fund at the University of Washington and the Deloitte and Touche Foundation. Helpful comments were provided by the editor, Ray Ball, Sudipta Basu (the referee), workshop participants at the University of Washington, Southern Methodist University, Brigham Young University, and the University of Utah and Bill Beaver, Gary Biddle, Robert Bowen, Linda DeAngelo, Steve Glover, Thomas Hemmer, Alister Hunt, Jim Jiambalvo, Eric Noreen, Ed Rice, Terry Shevlin, D. Shores and Doug Skinner.