Auditors are required by the Foreign Corrupt Practices Act and other rules to evaluate the probability that a firm's management bribes foreign government officials. If the auditors comply with these rules by assessing higher audit risk for firms with operations in corrupt foreign countries, we...

Theory suggests that financial-report-based debt covenants engender incentives for the manager to relax covenant constraints through accounting choices in order to avoid costly covenant violations. Prior studies directly testing this hypothesis in the context of financial misreporting fail to...

Theory suggests that financial-report-based debt covenants engender incentives for the manager to relax covenant constraints through accounting choices in order to avoid costly covenant violations. Prior studies directly testing this hypothesis in the context of financial misreporting fail to...

Extant evidence implies that managers rely on a variety of non-income-increasing techniques to manipulate earnings. However, prior research finds that the auditor is more likely to discipline firms against practicing income-increasing (II) earnings management due to its higher litigation and...

We examine which of two opposing financial reporting incentives that group-affiliated firms experience shapes their accounting transparency evident in auditor choice. In one direction, complex group structure and intra-group transactions enable controlling shareholders to pursue diversionary...

This study investigates whether local gambling norms are associated with audit pricing. Using a religion-based measure of social gambling preferences, we find robust evidence that public firms located in U.S. counties with more liberal gambling norms exhibit higher levels of audit fees. This...

This study investigates whether local gambling norms are associated with audit pricing. Using a religion-based measure of local social gambling norms, we find strong evidence that public firms located in U.S. counties with more liberal gambling norms exhibit higher levels of audit fees. This...

This study examines whether the term of the auditor-client relationship (i.e., auditor tenure) is associated with future stock price crash risk measured both ex ante and ex post. Using a large sample of U.S. public firms with Big Four auditors, we find robust evidence that auditor tenure is...