In 2001, Nevada significantly limited the personal legal liability of corporate officers and directors. We use this exogenous shock to implement a differences-in-differences design that examines the impact of officer and director litigation risk on agency costs. We find decreased firm value,...

Regulatory pressure to increase both audit committee financial expertise and board independence has resulted in lower status for audit committees relative to management. This status differential is relevant because expertise and relative status are important determinants of each party׳s ability...

Audit firms continue to lobby for legal liability limits based on their contention that catastrophic civil litigation is a realistic possibility. However, others disagree that catastrophic litigation is a viable threat to the audit firms and oppose legal reform at this time. To inform this...