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作者：Kang, Yoon Ju; Piercey, M. David; Trotman, Andrew
作者单位：University of Massachusetts System; University of Massachusetts Amherst; Northeastern University
摘要：The current audit environment encourages auditors to conduct defensive auditing procedures in lieu of using new, innovative, and potentially more effective audit procedures, due to concerns these procedures may be second-guessed in litigation or by audit inspectors such as the PCAOB. As a result, auditors may prefer traditional generally accepted procedures over innovative procedures that are potentially more effective. We test recent proposals that an Audit Judgment Rule (AJR) encourages the ...
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作者：Lambert, Tamara A.; Peytcheva, Marietta
作者单位：Lehigh University
摘要：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 consequence, a bundle of evidence may be viewed as weaker evidence than the bundle's strongest evidence item alone. We experimentally examine whether this averaging effect occurs in an audit context, and...
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作者：Billings, Bruce K.; Moon, James R.; Morton, Richard M.; Wallace, Dana M.
作者单位：State University System of Florida; Florida State University; University System of Georgia; Georgia Institute of Technology; State University System of Florida; University of Central Florida
摘要：The executive compensation literature presumes that shareholders offer risk-averse managers stock options to entice them to take on more risk, resulting in riskier investment decisions and thus a greater return on investment. However, recent empirical work challenges this assumption, and theoretical research even argues that high levels of option-based compensation for generally under-diversified managers may actually lead to greater risk aversion. We evaluate the incentive structure of employ...
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作者：D'Augusta, Carlo; DeAngelis, Matthew D.
作者单位：Middle Tennessee State University; University System of Georgia; Georgia State University
摘要：We investigate whether accounting conservatism, which has been found to be effective in constraining management opportunism in other settings, constrains upward tone management (UTM) in the Management's Discussion and Analysis (MD&A) portion of the 10-K filing. We hypothesize that conservatism makes it harder for managers to opportunistically downplay bad news and magnify good news when discussing current performance. Consistent with this hypothesis, we find that UTM is negatively associated w...
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作者：Frankel, Richard; Kim, Bong H.; Ma, Tao; Martin, Xiumin
作者单位：Washington University (WUSTL); Seoul National University (SNU); Texas Tech University System; Texas Tech University
摘要：Using novel receivable-based loan data, we study the effect of aging-report loan covenants on borrowers' accounts receivable reporting quality. Our purpose is to highlight a channel that lenders use to obtain private information and to understand whether lenders' information acquisition affects the financial reporting quality of borrowers. Compared to receivable-based borrowers without aging-report requirements (control firms), borrowers with such requirements (test firms) increase their recei...
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作者：Eugster, Florian
作者单位：Stockholm School of Economics
摘要：Research on the effects of voluntary disclosure quality on the cost of equity capital is often plagued by endogeneity concerns. In this paper, I use a dynamic panel system GMM estimator, which provides internal instruments from the firm's history that directly address endogeneity arising from unobserved heterogeneity and simultaneity. By using hand-collected voluntary disclosure scores for firms listed in the Swiss stock exchange, I examine the dynamic relation between voluntary disclosure qua...
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作者：Pittman, Jeffrey; Zhao, Yuping
作者单位：Memorial University Newfoundland; Virginia Polytechnic Institute & State University; University of Houston System; University of Houston
摘要：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 find consistent evidence. Using a more refined measure of debt covenant restriction, we find that debt covenant restriction is positively associated with the probability of financial statement misstatemen...
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作者：Cohen, Daniel; Pandit, Shailendra; Wasley, Charles E.; Zach, Tzachi
作者单位：Texas A&M University System; Texas A&M University College Station; University of Illinois System; University of Illinois Chicago; University of Illinois Chicago Hospital; University of Rochester; University System of Ohio; Ohio State University
摘要：To test hypotheses about earnings management, many studies investigate managers' manipulation of real activities (real earnings management, REM). Tests using measures of abnormal REM hinge critically on the measurement of normal real activities. Yet, there is no systematic evidence on the statistical properties of commonly used REM measures. We provide such evidence by documenting the Type I error rates and power of the test of the REM measures commonly used in the literature. We find these me...
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作者：Keskek, Sami; Myers, James N.; Myers, Linda A.
作者单位：State University System of Florida; Florida State University; University of Tennessee System; University of Tennessee Knoxville
摘要：Prior studies use fundamental earnings forecasts to proxy for the market's expectations of earnings because analyst forecasts are biased and are available for only a subset of firms. We find that as a proxy for market expectations, fundamental forecasts contain systematic measurement errors analogous to those in analysts' biased forecasts. Therefore, these forecasts are not representative of investors' beliefs. The systematic measurement errors from using fundamental forecasts to proxy for mar...
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作者：Palmon, Dan; Sarath, Bharat; Xin, Hua C.
作者单位：Rutgers University System; Rutgers University Newark; Rutgers University New Brunswick; University of Louisville
摘要：We select a small set of recommendations that lie in the upper and lower tail of the empirical distribution of divergences between a recommendation, and the consensus over the window (-30, -1) days prior to that recommendation. We classify these extremely divergent recommendations as bold, and then subdivide them into informative bold recommendations that lead other analysts (leading-bold) and those that are ignored by other analysts (contra-bold) based on the consensus change in the 30 days a...
