Consequences of state-level regulations in accounting, finance, and corporate governance: A review

We review the literature on the consequences of U.S. state-level local regulations for various corporate outcomes in the accounting, finance, and corporate governance domain. We argue that state-level regulations might affect corporate outcomes through at least two channels. First, the state intervention channel that includes state reg-ulations pertinent to auditor liability, director-liability, and shareholder litigation rights. Second, the dispute resolution channel as reflected in circuit court rulings. Our review shows that these regulatory and legal effects have had profound implications for various corporate outcomes.