Discussion of 'Private firms and the economic role of accounting: A review of empirical research'

Abstract

This discussion reviews and reflects on Bernard and Sutherland's (2026) survey of empirical research on private firms and the economic role of accounting. It traces the emergence of large-sample private-firm research, highlights persistent challenges related to data availability, firm heterogeneity, and causal identification, and questions the applicability of listed-firm conceptions of what constitutes a financial report to smaller private firms. I urge a shift in research toward studying how private firms generate accounting information and select which accounting items to include in their financial reports, and offer conjectures on the determinants of such accounting choices. The discussion also highlights the weaker and more heterogeneous nature of accounting regulation and enforcement across private firms and concludes with a call for broader, more descriptive, and institutionally grounded research on accounting's economic role beyond that in public firms.