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作者：Robin, Ashok; Wu, Qiang; Zhang, Hao
作者单位：Rochester Institute of Technology; Rensselaer Polytechnic Institute
摘要：This study examines the impact of auditor quality on financial covenants in debt contracts. We conjecture that high-quality auditors have two related effects on these debt covenants: (i) they encourage fewer and less restrictive covenants by providing assurance to lenders at contract inception and, consequently, (ii) they ensure a lower probability of eventual covenant violations. Consistent with the conjectures, we find that auditor quality is negatively associated with the intensity and tigh...
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作者：Batta, George; Muslu, Volkan
作者单位：Claremont Colleges; Claremont McKenna College; Claremont Graduate University; University of Houston System; University of Houston
摘要：Moody's analysts and sell-side equity analysts adjust GAAP earnings as part of their research. We show that adjusted earnings definitions of Moody's analysts are significantly lower than those of equity analysts when companies exhibit higher downside risk, as measured by volatility in idiosyncratic stock returns, volatility in negative market returns, poor earnings, and loss status. Relative to the adjusted earnings definitions of equity analysts, adjusted earnings definitions of Moody's analy...
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作者：Evans, Mark E.; Njoroge, Kenneth; Yong, Kevin Ow
作者单位：Wake Forest University; William & Mary; Peking University
摘要：In this paper, we propose and empirically test a cross-sectional profitability forecasting model which incorporates two major improvements relative to extant models. First, in terms of model construction, we incorporate mean reversion through the use of a two-stage partial adjustment model and inclusion of a number of additional relevant determinants of profitability. Second, in terms of model estimation, we employ least absolute deviation (LAD) analysis instead of ordinary least squares becau...
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作者：Koo, David S.; Julie Wu, J.; Yeung, P. Eric
作者单位：University of Illinois System; University of Illinois Urbana-Champaign; University of Nebraska System; University of Nebraska Lincoln; Cornell University
摘要：Managers frequently attribute the news in their earnings forecasts to various economic events. Using textual analysis, we identify the economic factors underlying earnings news from press releases. We document a wide range of industry-wide shocks and firm-specific actions to which the earnings news in management forecasts is attributed. As expected, earnings attributions significantly affect peer firms' price reactions to the earnings news. Specifically, earnings news attributed to industry-wi...
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作者：Jorgensen, Bjorn N.; Morley, Julia
作者单位：University of London; London School Economics & Political Science
摘要：Kohlbeck and Mayhew (2017) create a new data set featuring two types of related party transactions. They use empirical-archival methods to investigate the effect of such transactions on the likelihood of restatements and on audit fees. Their findings suggest that related party transactions related to directors, officers and major shareholders are associated with poor tone at the top and that this leads management to negotiate for lower-quality audits to minimize monitoring costs. To offer aven...
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作者：Bhattacharjee, Sudip; Moreno, Kimberly K.
作者单位：Virginia Polytechnic Institute & State University; Northeastern University
摘要：While accounting research has demonstrated the role of a decision maker's own emotions during judgments, psychology research proposes that others' emotions provide an informational signal to assess an opponent's limits, cooperativeness, and toughness during bargaining. We examine how a bargaining opponent's emotions provide information signals that can be used by a selling division manager during transfer pricing decisions and whether informal control system choices by corporate management to ...
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作者：Feller, Anna; Schanz, Deborah
作者单位：University of Munich
摘要：The question of why some companies pay fewer taxes than others is a widely investigated topic of interest. One of the well-known explanations is a phenomenon called tax avoidance. We develop a grounded theory model of influences on corporate tax planning through a series of 19 in-depth German tax expert interviews. Our research identifies three independent hurdles in the tax planning process, which can help to explain different levels of tax expense across companies. Those three hurdles sequen...
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作者：Choi, Jong-Hag; Kim, Seil; Raman, K. K.
作者单位：Seoul National University (SNU); City University of New York (CUNY) System; Baruch College (CUNY); University of Texas System; University of Texas at San Antonio
摘要：We examine the effects of the 1998 merger of Price Waterhouse (PW) and Coopers & Lybrand (CL) on the audit quality of the merged firm PricewaterhouseCoopers (PwC) at both the firm and office levels, where audit quality is surrogated by the auditor's propensity to issue a going-concern opinion, clients' likelihood of meeting or beating analysts' earnings forecasts, and clients' accrual quality. At the firm level, we find that the merger increased audit quality for PwC relative to the audit qual...
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作者：Chen, Yangyang; Sadique, Shibley; Srinidhi, Bin; Veeraraghavan, Madhu
作者单位：Hong Kong Polytechnic University; University of Rajshahi; University of Texas System; University of Texas Arlington
摘要：The finance literature offers two competing possibilities on how investors respond to the quality of public financial statements in their pricing decisions. They could collect either (i) more private information to benefit from lower information collection cost, or (ii) less private information because of lower incremental benefits. In this paper, we use the audit setting to examine which possibility prevails. Using the idiosyncratic return volatility as a proxy for firm-specific information, ...
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作者：Kohlbeck, Mark; Mayhew, Brian W.
作者单位：State University System of Florida; Florida Atlantic University; University of Wisconsin System; University of Wisconsin Madison
摘要：This study investigates whether or not related party transactions serve as red flags that warn of potential financial misstatement. We hand-collect related party transactions for S&P 1500 firms in 2001, 2004, and 2007 and find a positive correlation between these transactions and future restatements, suggesting restatements are more likely when a firm engages in related party transactions. The association is concentrated among transactions that appear to reflect tone at the top rather than arg...
