Prior research documents that information transmitted via director networks affects firms' policies and real economic activities. We explore whether information flow through director networks influences managers' ability to hoard bad news. We find that the extent of external connections of the...

We analyze whether tough IRS monitoring generates a positive externality by constraining managers' bad news hoarding activities. Supporting this prediction, we find a negative relation between the threat of an IRS audit and stock price crash risk. Our evidence is consistent with recent theory...

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...

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...

In measuring tunneling with inter-corporate loans disclosed by Chinese listed companies, we analyze the underlying channels through which aggressive tax planning facilitates the diversion of corporate resources by firm insiders. Using path analysis, we document that the path from tax...

Psychological and upper echelons theories suggest that CEOs with the personality trait of sensation seeking shape corporate policies. In gauging sensation seeking with whether the CEO holds a pilot license, we examine its importance to firms' accounting conservatism. Our evidence implies that...