This study examines investors' response to the disclosure of prior period, auditor-waived misstatements under Staff Accounting Bulletin No. 108, Considering the effects of prior year misstatements when quantifying misstatements in the current year. Auditors' misstatement correction decisions...

This study examines investors' response to the disclosure of prior period, waived misstatements under Staff Accounting Bulletin No. 108, Considering the effects of prior year misstatements when quantifying misstatements in the current year. Misstatement correction decisions typically are not...

In this study, we explore the association between company reputation and the likelihood of a financial statement restatement (i.e., a revealed misstatement). We focus on restatements because they are one of the most visible forms of impaired financial reporting quality, and we suggest that...

This study examines whether qualitative disclosure in tax footnotes affects the market valuation of tax avoidance activities. We predict that more disclosures in tax footnotes mitigate investors’ concerns over the agency risk of managers engaging in potentially illegal tax avoidance and...

Events leading up to the implementation of the Sarbanes-Oxley Act of 2002 (SOX) increased the public's focus on corporate governance and increased regulatory scrutiny of corporate governance mechanisms. These events also contributed to a massive restructuring in the audit market which resulted...

We examine changes in the association between auditor type (Big 4, Second-Tier, and Other non-Big 4) and perceived financial reporting credibility in the wake of events (e.g., Andersen's failure, the implementation of SOX, creation of the PCAOB, etc.) which led to significant growth in...

We investigate whether variation in the volatility of tax outcomes across firms is associated with the extent of financial constraints. We document a positive association between current-period financial constraints and the volatility of cash effective tax rates in subsequent periods. We find...

This study examines the association between the industry diversity of an audit office and audit quality, where industry diversity is the extent to which clients differ by industry classification. We find a negative association between industry diversity and audit quality that is robust to...

We examine whether incumbent firms react to significant IPOs in the same industry by adjusting their tax policy to align with the tax outcomes of the IPO firm. We find that incumbent firms adjust their effective tax rate in response to the difference between it and the effective tax rate of the...