Firms undertaking an initial public offering (IPO) appoint investment bankers and auditors to certify information disclosed to investors. We examine the role that alma-mater ties between the two intermediaries play in shaping audit quality. Although some evidence suggests that information...

We analyze the impact of cross-audits between companies and mutual funds on auditors' reporting decisions. We document that companies are more likely to receive favorable audit opinions when they appoint the same auditor as their mutual fund blockholders. In cross-sectional evidence consistent...

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 document that firms held by mutual fund managers who worked in public accounting earlier in their careers exhibit higher quality financial reporting. In cross-sectional evidence consistent with expectations, we find that the role that fund manager public accounting experience plays is...

We extend prior research by exploring the importance of social ties among auditors' clients to audit quality. On one hand, social ties foster communication among clients concerning how to deal with an auditor, helping clients negotiate against proposed audit adjustments. On the other hand,...

Capitalizing on a quasi-natural experiment in China where certain investment banks become investible to the global market across different periods, we explore the role that stock market liberalization plays in shaping local analysts' incentives to provide high quality forecasts. In a staggered...

Theory suggests that financial-report-based debt covenants engender incentives for the manager to relax covenant constraints through accounting choices in order to avoid costly covenant violations. Prior studies directly testing this hypothesis in the context of financial misreporting fail to...

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...

By analyzing a large panel of elections in 55 countries, we show that political uncertainty surrounding elections can affect asymmetric cost responses to activity changes (i.e., cost stickiness). In comparison to non-election years, we find that the asymmetry in cost behaviors is stronger during...

Theory suggests that financial-report-based debt covenants engender incentives for the manager to relax covenant constraints through accounting choices in order to avoid costly covenant violations. Prior studies directly testing this hypothesis in the context of financial misreporting fail to...