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...