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作者：Ashbaugh-Skaife, Hollis; Collins, Daniel W.; Kinney, William R., Jr.; LaFond, Ryan
作者单位：University of Wisconsin System; University of Wisconsin Madison; University of Iowa; University of Texas System; University of Texas Austin
摘要：The Sarbanes-Oxley Act (SOX) mandates management evaluation and independent audits of internal control effectiveness. The mandate is costly to firms but may yield benefits through lower information risk that translates into lower cost of equity. We use unaudited pre-SOX 404 disclosures and SOX 404 audit opinions to assess how changes in internal control quality affect firm risk and cost of equity. After controlling for other risk factors, we find that firms with internal control deficiencies h...
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作者：Choudhary, Preeti; Rajgopal, Shivaram; Venkatachalam, Mohan
作者单位：Georgetown University; University of Washington; University of Washington Seattle; Duke University
摘要：In December 2004, the Financial Accounting Standards Board (FASB) mandated the use of a fair value-based measurement attribute to value employee stock options (ESOs) via Financial Accounting Standard (FAS) 123-R. In anticipation of FAS 123-R, between March 2004 and November 2005, several firms accelerate the vesting of ESOs to avoid recognizing existing unvested ESO grants at fair value in future financial statements. We find that the likelihood of accelerated vesting is higher if (1) accelera...
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作者：Kausar, Asad; Taffler, Richard J.; Tan, Christine
作者单位：University of Manchester; University of Edinburgh; Fordham University
摘要：We explore the market response to announcements of first-time going-concern (GC) audit opinions and, for a subset of these cases, their subsequent withdrawal, from 1993 to 2005. We find that the market fully responds to GC withdrawal announcements but underreacts to the GC announcements themselves, resulting in a downward drift of -14% over the one-year period subsequent to the GC opinion. This result is robust to alternative explanations documented in prior literature. However, after adjustin...
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作者：Baik, Bok; Farber, David B.; Petroni, Kathy
作者单位：Seoul National University (SNU); University of Missouri System; University of Missouri Columbia; Michigan State University; Michigan State University's Broad College of Business
摘要：We examine whether analysts' incentives are associated with street earnings. Because prior research argues that analysts' incentives to promote stocks increase in the extent to which the stock exhibits glamour characteristics, we predict that analysts are more likely to make income-increasing adjustments in determining street earnings for glamour stocks than for value stocks. We find that analysts are more likely to exclude expense items from street earnings for glamour stocks than for value s...
