Auditing standards task auditors with collecting sufficient appropriate evidence to form audit judgments. Yet cognitive psychology documents a robust finding in which people evaluate a bundle of relevant, directionally consistent evidence as though averaging the strength of the components. In...

The Securities and Exchange Commission (SEC) sanctioned investor-paid rating agency Egan-Jones for falsely stating that it did not know its clients' investment positions. The SEC's action against Egan-Jones raises the broad question whether knowledge of clients' investment positions creates a...

Auditing standards task auditors with collecting sufficient appropriate evidence to form audit judgments. Yet cognitive psychology documents a robust finding in which people evaluate a bundle of relevant, directionally consistent evidence as though averaging the strength of the components. In...

This study examines how emphasis framing in narrative disclosures, and the investor characteristics numeracy and persuadability, affect investors' ability to discriminate between firms' better and worse financial performance. In an experiment with 264 participants from the general population, we...

Using financial institution mergers as exogenous shocks to common ownership, we find that stock prices of commonly held firms incorporate future earnings news more quickly and are less sensitive to noise traders. Our analyses show that the increase in price informativeness is due to: (1)...

We document a walk-down in GDP growth projections that is akin to that in sell-side analysts' earnings forecasts. While the walk-down in earnings forecasts has been generally attributed to the strategic interplay between corporate managers and sell-side analysts, professional macro forecasters...