Principal-versus-Agent Considerations in Revenue Recognition Under ASC 606 and Compliance Risk
通过文本分析和手工收集的数据，研究发现ASC 606实施前，面临委托人与代理人问题的公司合规风险更高，表现为更易收到SEC意见函和更高审计费用；实施后风险下降，表明新准则简化了评估并降低了合规风险。
ABSTRACT Using a dataset constructed through textual analysis and manual data collection, we show that, prior to ASC 606, firms with principal-versus-agent (PA) exposure face heightened GAAP compliance risk, reflected in a greater likelihood of receiving revenue-related SEC comment letters and higher audit fees. Following the adoption of ASC 606, these differences decline, consistent with the standard’s stated goal of simplifying PA assessments and reducing implementation challenges. Overall, our findings provide the first large-sample evidence on PA considerations and show that ASC 606 mitigates compliance risk, although further analyses suggest additional disclosure may be needed to mitigate information challenges associated with PA assessments. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: L86; M41; M42; M48.