We investigate the joint effects of analyst reputation, uncertainty, and guidance news valence on analysts’ reliance on management guidance. We find that, compared to less reputable analysts, reputable analysts rely less on guidance when they issue earnings forecasts. This analyst reputation...

The decision-usefulness of the direct versus indirect presentation method of a cash flow statement has been a long-standing issue both in practice and accounting research. By capitalizing on comparative advantages of experimental methods, we provide insights into how investors process the...

We conduct two experiments to examine the joint effect of two justification factors of earnings management, namely attribution for the firm’s underperformance and benefits accruing to other employees from inflating reported earnings. In the main experiment, we predict and find that managers...

Corporate governance reforms and the threat-safeguard approach to auditor independence regulations are motivated by the assumption that disclosure by an agent (e.g., auditor) of a potential conflict of interest reduces bias in professional judgment. In this study, we conduct an experiment using...

In this study, we examine how norms about the use of negotiation strategies by different parties in an auditor-client negotiation influence the relative efficacies of these negotiation strategies. We conduct an experiment with experienced auditors/financial managers as participants, who enter...

We investigate whether the relation between auditor tenure and audit quality is conditional on auditor specialization and fee dependence. Although prior studies have investigated the relation between extended auditor-client tenure and audit quality, none has examined how this relation is jointly...

We examine determinants of audit engagement profitability using proprietary data from the national office of a Big 4 public accounting firm in Canada. We verify through interviews with senior audit partners that the audit realization rate is the primary measure used to assess engagement level...

We conduct two experiments with experienced accountants to investigate how fair value accounting affects managers' real economic decisions. In Experiment 1, we find that participants are more likely to make sub-optimal decisions (e.g., forgo economically sound hedging opportunities) when...

We report the results of an experiment which shows that investors' earnings- and investment-related judgments are jointly influenced by their investment position (long versus short), the news valence of guidance issued by management, and the amount of ambiguity in the guidance. Prior research...

We report the results of an experiment which shows that investors' earnings- and investment-related judgments are jointly influenced by their investment position (long versus short), the news valence of guidance issued by management, and the amount of ambiguity in the guidance. Prior research...