Although firms are encouraged by the Securities and Exchange Commission (SEC) and Department of Justice (DOJ) to conduct internal investigations following financial misconduct, prior research finds few benefits for investigating firms. This study examines a novel aspect of internal...

This study recovers a simple firm-level measure of disclosure costs implied by the voluntary disclosure theory of Verrecchia (1990). The measure does not require a-priori knowledge by the researcher of the distribution of private information and can be implemented with three simple observable...

This paper examines the interplay between the SEC and misconduct firms under the modified leniency program of 2010. In contrast to prior research that finds the SEC penalizes cooperative violators prior to 2010, we show that the Commission now rewards cooperation after 2010. The post-2010 change...

One of the most crucial yet controversial issues in executive performance evaluation is disentangling which managerial decisions reflect the firm's economic position versus opportunistic earnings management. I explore this issue and find evidence that specific managerial policies often used by...

Asset pricing theory postulates that a risk factor correlates with individuals' marginal utility of consumption. Hence, under plausible preferences, individuals should become more risk tolerant given favorable factor returns. We show that this wealth effect predicts a positive association...

The U.S. Congress passage of the Sarbanes-Oxley Act of 2002 (SOX) was a direct response to the accounting scandals of the 1990s and an attempt to reform the financial/business reporting process. Due to corporate malfeasance in the United States since the mid 1990s, there has been a significant...

As of January 1, 2013, most of the world financial market economies are using International Reporting Standards (IFRS) as the required framework for financial statements. A non-comprehensive listing includes the European Union Countries, Canada, Australia, Japan and New Zealand. In the United...

The positive influences of institutions to economic growth, commonly measured by GDP per capita, have been intensively tested by many empirical studies. However, as the challenges of pollution, corruption, and inequality raise up, the quality of economic development and how to achieve the good...