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作者：Rothenberg, Naomi R.
作者单位：University of Alberta
摘要：This paper studies how legal liability due to negligence can weaken or strengthen an auditor's reputation concerns in the client market to provide high audit effort. A negligence liability rule relies on auditing standards to provide a threshold for the level of due care. When the negligence standard is lax, legal liability can weaken the auditor's reputation incentives, with lower audit effort than without legal liability. If the damage payment is low, noncompliance is less costly, because wi...
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作者：Weber, David P.; Yang, Yanhua Sunny
作者单位：University of Connecticut
摘要：When larger market values of equity result in being subject to costly regulation, firms have incentives to shift their sources of financing toward debt and away from equity. We use the Sarbanes-Oxley Act of 2002 (SOX) as a setting to provide evidence of such incentives. Smaller firms were granted several reprieves and eventually exempted from the internal control audit requirements of SOX Section 404, which many consider the most costly and onerous aspect of SOX. Using a difference-in-differen...
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作者：Rouen, Ethan
作者单位：Harvard University
摘要：I develop measures of firm-level pay disparity and examine their relation to firm performance. Using comprehensive compensation data for a large sample of firms, I find no statistically significant relation between the ratio of CEO-to-mean employee compensation and performance. I next create empirical models that allow me to separate the components of CEO and employee compensation explained by economic factors from those that are not, and use these models to estimate explained and unexplained ...
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作者：Kelly, Khim; Dinovitzer, Ronit; Gunz, Hugh; Gunz, Sally P.
作者单位：State University System of Florida; University of Central Florida; University of Toronto; University of Waterloo
摘要：This paper examines how the interaction of perceived subjectivity and pay transparency in profit allocation is associated with an important aspect of law partners' professional judgment, namely their tendency to accede to the wishes of their client and fellow partner (labeled hereafter as partner accedence). Based on interviews with 56 corporate law partners working in large Canadian law firms, we find higher partner accedence in a less subjective system than in a more subjective system, but o...
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作者：Lambert, Richard A.
作者单位：University of Pennsylvania
摘要：This paper responds to Hemmer's (2020) critique of Lambert's (1984) paper on income smoothing. Lambert develops and analyzes a two-period agency model in which he shows income smoothing, defined as the second-period action being a decreasing function of the first-period outcome, is part of the equilibrium. Hemmer claims Lambert's analysis contains errors, and that income smoothing does not occur in the model for the reasons Lambert claims. Here, I confirm the Lambert results, show why Hemmer's...
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作者：Hepfer, Bradford F.; Wilde, Jaron H.; Wilson, Ryan J.
作者单位：Texas A&M University System; Texas A&M University College Station; University of Iowa; University of Oregon
摘要：Using the shadow insurance setting, we study the interplay between tax and nontax incentives in income shifting. Shadow insurance involves intercompany transactions designed to help firms meet regulatory capital requirements. However, prior to the Tax Cuts and Jobs Act of 2017 (TCJA), foreign-owned life insurance firms could save taxes by using shadow insurance to shift U.S. profits to tax havens. Consistent with expectations, we find that while nontax incentives appear to be the dominant fact...
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作者：Bhat, Gauri; Desai, Hemang A.
作者单位：Southern Methodist University
摘要：This paper empirically examines the association between bank capital and banks' monitoring effort. We use four proxies to measure the unobservable monitoring effort. Two of the proxies are based on loan quality (ex post outcomes of monitoring effort). The other two proxies are based on salary expense (ex ante proxies intended to capture the quality and quantity of labor input into monitoring effort). Using a bank and time fixed effects estimation, we find a positive association between bank ca...
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作者：Florou, Annita; Morricone, Serena; Pope, Peter F.
作者单位：Bocconi University; Bocconi University
摘要：We examine the costs and benefits of proactive financial reporting enforcement by the U.K. Financial Reporting Review Panel. Enforcement scrutiny is selective and varies by sector and over time, yet can be anticipated by auditors and companies. We find evidence that increased enforcement intensity leads to temporary increases in audit fees and more conservative accruals. However, cross-sectional analysis across market segments reveals that audit fees increase primarily in the less-regulated AI...
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作者：Glover, Jonathan C.; Xue, Hao
作者单位：Columbia University; Duke University
摘要：Teamwork and team incentives are increasingly prevalent in modern organizations. Performance measures used to evaluate individuals' contributions to teamwork are often non-verifiable. We study a principal-multi-agent model of relational (self-enforcing) contracts in which the optimal contract resembles a bonus pool. It specifies a minimum joint bonus floor the principal is required to pay out to the agents, and gives the principal discretion to use non-verifiable performance measures to both i...
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作者：Clor-Proell, Shana M.; Guggenmos, Ryan D.; Rennekamp, Kristina
作者单位：Texas Christian University; Cornell University
摘要：We examine how information dissemination via mobile device applications (apps) affects nonprofessional investors' judgments. In response to the prevalence of mobile device use, the media ungroups content into smaller pieces to accommodate users, and apps use push notifications to highlight this content. These changes increase users' ability to access investment information in real time, leaving some investors feeling as if they are missing out if they are not continuously connected. We validat...
