We examine how adjustments to earnings during year-end audits affect measures of earnings quality. There are four key findings. First, audit adjustments cause earnings to become smoother and more persistent. Second, the adjustments result in higher accrual quality. Third, audit adjustments have...

Acquirers are motivated to overstate earnings prior to stock-financed acquisitions. We hypothesize that audits help to detect and correct such overstatements. We test this using a difference-in-differences design, which compares audit adjustments to earnings for stock-financed and cash-financed...

The Chinese stock markets provide a unique experimental setting in which to examine how cash and stock dividends convey value relevant information about future performance and future cash dividends. Utilising market valuation equations based on Ohlson (1995), as well as prediction models, and...