This study provides novel information about the consequences of the Sarbanes-Oxley Act (SOX) by documenting differential audit fee shocks accompanying implementation of SOX 404(b) internal control tests and reports for clients in three size categories: large accelerated filers (LAFs), small...

Prior studies have theoretically and empirically documented that incentives to disclose information involve a trade-off between the benefits to the corporation of reducing information asymmetry and the costs of revealing proprietary information. This study investigates the interplay of managers'...

Positive accounting theory predicts that conservative financial reporting averts GAAP-based litigation. However, very little empirical evidence addresses whether and how accounting conservatism provides these benefits. Using a sample of lawsuits against public companies for alleged violations of...

We examine whether Basu's (1997) differential timeliness metric and the related C-Score metric are effective in detecting predictable differences in conservatism surrounding corrections of overstated earnings. Cross-sectional and time-series analyses, employing 2,132 firms making restatements...

The scandal that followed Enron's failure to disclose billions of dollars of debt held by off-balance sheet entities (OBSEs) prompted investor interest in these entities, and motivated auditors to request more guidance. The SEC responded by issuing Financial Release 61 (FR-61) to remind managers...

This study focuses on the stock market reaction to denial of service attacks against certain well-known Internet firms in February 2000. Investors appear to have used several heuristics in deciding which firms were 'similar' to those attacked, and thus predicted that they were also likely to be...

This study provides empirical evidence that capital markets participants believe e-commerce activity subjects companies to incremental firm-specific risk. We identify and measure proxies for e-commerce risks using a diverse sample of Internet and other firms. We first investigate investors'...

This study investigates companies' decisions to disseminate financial information at their corporate Internet Web sites. We expect that companies tailor the selection of data items presented at their sites to the relative sophistication of their user base. Based on prior literature, we predict...

This study investigates client choice of industry specialist auditors from among the Big N (Big 4 or 5) in an international (non-U.S.) setting. We investigate client-specific, industry-level and country-level factors hypothesized to enhance or decrease Big N clients' demand for industry...

This study investigates the association of audit fee pressure with an inverse measure of audit quality, misstatements in audited data, during the recent recession. Fee pressure in a year is measured as the difference between benchmark “normal” audit fees and actual audit fees. We find fee...