Although conceptual frameworks of the Financial Accounting Standards Board and the International Accounting Standards Board identify relevance and faithful representation as the fundamental qualitative characteristics of useful information, prior research suggests that revenue recognition...

We use regression discontinuity design to evaluate the effects of Section 404(b) of the Sarbanes-Oxley Act (SOX) on audit costs and financial reporting and how these effects have changed over time. While audit fee premiums associated with 404(b) compliance were substantial in the initial years...

Policies and procedures that centralize decision-making within an audit firm create auditor style effects. Prior research suggests that auditor style increases financial statement comparability, implicitly making financial statements more useful. However, a potential hazard of auditor style is...

Managers have a variety of tools at their disposal to influence stakeholder perceptions. Earnings management and the strategic reporting of non‐GAAP earnings are just two of the available menu choices. We explore how real earnings management and accruals management influence the probability...

We investigate the relation between audit committee co-option and financial reporting quality, where audit committee co-option is measured as the proportion of audit committee members who joined the board after the appointment of the current Chief Executive Officer (CEO). Because CEOs are often...

The correction and disclosure prominence of misstatements identified in previously audited financial statements depends largely on preparers' and auditors' materiality judgments. Despite being tasked with independent attestation, we posit that auditors' incentives to avoid reputational and legal...

Prior research documents improvements in pre-acquisition outcomes when acquirer and target firms engage the same audit firm to perform their financial statement audits before the acquisition. In contrast to prior studies, we examine whether the advantages of engaging a common auditor prior to an...

We test whether agency conflicts generated by the divergence between insider voting rights and cash flow rights (i.e., disproportionate insider control) within dual-class firms reduce the informativeness of stock returns about future earnings. We find that the future earnings response...