-
作者：Campbell, John L.; Goldman, Nathan C.; Li, Bin
作者单位：University System of Georgia; University of Georgia; North Carolina State University; University of Houston System; University of Houston
摘要：Over the past three decades, academic research has sought to understand how cash shortfalls impact a firm's ability to take all available value-increasing investment projects. We investigate whether firms facing greater financing constraints turn to tax strategies that generate lower cash effective tax rates (ETRs) to mitigate the adverse effect of these financing constraints. We use the Pension Protection Act of 2006 (PPA 2006) as an exogenous shock to financing constraints for pension firms,...
-
作者：Frank, Michele; Maksymov, Eldar; Peecher, Mark; Reffett, Andrew
作者单位：University System of Ohio; Miami University; Arizona State University; Arizona State University-Tempe; University of Illinois System; University of Illinois Urbana-Champaign
摘要：Regulators and researchers tend to focus primarily on the risk-shifting benefits of audit liability insurance. We obtain field data from the US audit insurance industry (16 interviews and 83 survey responses) to examine whether insurers also possess characteristics favorable to transferring their private risk management knowledge to the audit firms they insure. Possessing such characteristics would enable insurers to use their relative knowledge advantage to provide a benefit to audit firms be...
-
作者：Rennekamp, Kristina M.; Witz, Patrick D.
作者单位：Cornell University; University of Wyoming
摘要：As firms increasingly use social media to provide disclosures to investors, it is important to understand whether the characteristics that are associated with these disclosures lead to different reactions from investors than disclosures provided via more traditional channels. In this paper, we use an experiment to examine whether linguistic formality in positive news disclosures, and engagement of social media users surrounding the disclosures (e.g., likes and retweets), affect investors' judg...
-
作者：Wei, Chunyan
作者单位：Shanghai University of Finance & Economics
摘要：Prior research has examined target setting in market-driven companies but has not examined target setting in state-run companies that also have social and political objectives. I examine how Chinese state-owned enterprises (SOEs) set and revise performance targets to motivate a balanced effort allocation. Using data on financial performance (sales) targets set by SOEs and non-SOEs during the period 2006-2016, I predict and find that the financial targets of SOEs are easier to achieve than thos...
-
作者：Campbell, John L.; D'Adduzio, Jenna; Downes, Jimmy F.; Utke, Steven
作者单位：University System of Georgia; University of Georgia; University of British Columbia; University of Nebraska System; University of Nebraska Lincoln; University of Connecticut
摘要：Cash flow hedge derivatives are an example of an economic transaction that is not fully portrayed in the financial statements in two key ways. First, while changes in the fair value of the derivative are recorded at each reporting date, changes in the value of the underlying purchase or sale commitment are not recorded or disclosed until that transaction occurs. Therefore, until the purchase or sale occurs, the financial statements only portray half of the economic transaction. Second, the gai...
-
作者：Grabner, Isabella; Moers, Frank
作者单位：Maastricht University
摘要：We investigate the determinants and consequences of budget reallocations-that is, corrective changes to the budget made during the year. Using proprietary data from a large consumer goods manufacturer, we analyze the extent to which initial budgeting decisions drive reallocations. Examining this relationship is important because initial budget negotiations are often troubled by power struggles and politicking, which may give rise to the need for reallocations. We hypothesize that one important...
-
作者：Guo, Feng; Lin, Chenxi; Masli, Adi; Wilkins, Michael S.
作者单位：Iowa State University; University of Oklahoma System; University of Oklahoma - Norman; University of Kansas
摘要：In this paper, we investigate how auditors respond to shareholder activism against their clients. Our study is important because activism may be viewed by auditors as a source of increased engagement risk, thereby impacting audit outcomes. The potential relationship between shareholder activism and audit outcomes leads us to predict that activism targets will pay higher audit fees and also will be more likely to receive adverse internal control opinions (ICOs) and first-time going concern opin...
-
作者：Knechel, W. Robert; Mao, Juan; Qi, Baolei; Zhuang, Zili
作者单位：State University System of Florida; University of Florida; University of Auckland; University of New South Wales Sydney; University of Texas System; University of Texas at San Antonio; Xi'an Jiaotong University; Xinjiang University; Chinese University of Hong Kong
摘要：This study investigates why auditors leave public accounting and the consequences of auditor departures, both of which have been of great concern for audit firms and regulators worldwide. Using data from China and controlling for demographics, we find that audit partners and managers, auditors who generate more revenue, and auditors who provide higher audit quality have a lower likelihood of departure, while non-Big 4 auditors have a higher likelihood of departing public accounting. We also fi...
-
作者：Liu, Xinming; Lobo, Gerald J.; Yu, Hung-Chao
作者单位：Xiamen University; University of Houston System; University of Houston; National Chengchi University
摘要：Section 301 of the Sarbanes-Oxley Act (SOX) implicitly assumes that audit committees can independently determine audit fees. Critics of section 301 have questioned this assumption in particular, and the efficacy of section 301 more generally. In response, the SEC issued a concept release in 2015 calling for public disclosure of the process that audit committees follow for determining auditor compensation. Motivated by these calls and the widespread use of stocks and options to compensate firms...
-
作者：Hofmann, Christian; Indjejikian, Raffi J.
作者单位：University of Munich; University of Michigan System; University of Michigan
摘要：We study three elements of management control: incentive compensation, performance monitoring, and delegation of authority to managers to contract with lower-level employees. Using a principal-agent model, we highlight important direct and indirect interactions between and among these endogenous control elements, themes often emphasized in the economics and accounting literatures using the analogy of a three-legged stool. We identify circumstances in which control elements are complements or s...
