ABSTRACT. Caylor et al.'s study bridges a gap between results documented in financial accounting experimental studies and studies that use archival data within natural settings. Bowen et al. measure accounting discretion in three ways: (i) abnormal accruals usage; (ii) smoothing of earnings via accruals; (iii) avoiding earnings decreases by reporting small quarterly positive earnings surprises. Tan and Jamal stress that a reduction in discretion is predicted to lessen a manager's ability to communicate with shareholders.