We argue that conflicting estimates of auditors' industry leadership premia documented in prior research reflect model misspecification. We show that leadership measures can be expected to identify different auditors as leaders depending on the basis (assets, fees or auditee counts) used to...

The duration and magnitude of the private economic benefits obtained from firm-level R&D outlays are important to managers, investors and policy-makers. We present a modeling and estimation approach that facilitates reliable estimation of these benefits under mild a priori assumptions. Our...

We present the first large-sample empirical evidence on U.S. auditors' responses to changes in entity-level audit risk during 2006-2007, the period leading-up to the financial crisis of 2008-2009. Treating fiscal year 2005 engagements as a pre-crisis benchmark, we find that audit attention...

We study what a simulated market of pure price competition reveals about market shares and per-partner profits in Big Six audit firm mergers for 1997. In the model of audit production we use, leverage (staff-to-partner ratio) reflects the productivity of an audit partner and is key to analyzing...

In this study we compare the ability of alternative accounting methods for employee stock options (ESOs) to reflect firm value using the Ohlson [1995, 1999] and Feltham-Ohlson [1999] valuation models for a sample of 85 computer software firms. The three methods we compare are APB 25, ESO expense...

We investigate whether the financial riskiness of large US audit firm clienteles varied with the changing audit litigation liability environment during the period 1975-1999. Partitioning the period of study into four distinct periods [a benchmark period (1975-1984), a period of increasing...

Does bad news about one auditor's conduct affect the credibility of all auditors? We examine auditee abnormal stock returns around twenty-five bad news events involving Arthur Andersen LLP's (Andersen) questionable audits of Waste Management, Sunbeam, and Enron. Of these twenty-five windows,...

I develop a framework that elucidates how the primary target of auditors’ professional skepticism – audit evidence or their own judgment and decision making – interacts with other factors to affect auditors’ professional judgments. As an initial test of the framework, I conduct an...

Auditors and other professionals currently face a litigation crisis. An important cause of this crisis is that auditors' decision and actions are evaluated in light of an ill-defined standard of care and in hindsight. In this dissertation, I develop a model of juror decision making for...