We find empirical evidence that clients' real activities manipulation (RAM) varies across individual auditors. More specifically, both audit-firm and individual-auditor fixed effects on RAM are significant; yet only the latter remain significant in regressions including auditors' propensity to...

This paper examines the trade-off between common and peers' specific risks in relative performance evaluation (RPE). We establish that in order to remove common risk completely from management compensation contracts, it is sufficient and necessary that peers' weighted specific risks are lower....