This paper analyzes audit firm supervision since the Public Company Accounting Oversight Board (PCAOB) began conducting inspections. First, we find that audit clients do not perceive that the PCAOB's inspection reports are valuable for signaling audit quality. Second, we document that the...

Materiality has important implications for voluntary disclosures when there is an affirmative duty to disclose. Using a change in rules on the disclosure of advertising costs, Heitzman et al. (2009) empirically demonstrate that, indeed, it is important to factor in the effect of the materiality...

Based on extant literature, we review the positive theory of GAAP. The theory predicts that GAAP's principal focus is on control (performance measurement and stewardship) and that verifiability and conservatism are critical features of a GAAP shaped by market forces. We recognize the advantage...