Investments that are classified as Level 2 within the fair value hierarchy account for approximately 92% of US banks' fair value assets. We report an experiment that examines how experienced auditors apply current PCAOB guidance when auditing portfolios of these assets. We hypothesize and find...

In an experiment with 127 accounting professionals averaging over 18 years of experience, we investigate how two important characteristics related to auditing—prior audit negotiation outcomes and auditor expertise—affect (1) whether, on balance, the presence of an audit is more likely to...

We test whether an impending change in the accounting for goodwill mitigates bias in the initial values that acquirers assign to intangible assets. Results of two experiments with experienced professional participants suggest that the new accounting alters, but does not eliminate, bias in...