Using the principles of organizational economics, we assess the quality of the organizational architecture of the Public Companies Accounting Oversight Board (PCAOB). We use the Four Pillar Framework developed in Brickley, Smith, and Zimmerman (2000) to understand why—according to the SEC’s...

This paper examines the 2017 audit inspection scandal involving KPMG — one of the fewbreaches of “tone at the top” at a Big 4 audit firm — to study whether and how the scandal affectsKPMG and its clients. From the federal court trial related to the scandal, we construct a novel dataset...

Prior studies find evidence that opportunistic reporting occurs in settings where fair value measurement is used. However, such research cannot determine whether the source of the opportunistic reporting is the estimate of fair value itself. Using detailed insurer investment holdings...

This study examines the impact of control systems on corporate innovation. Innovation is key to firm performance and growth, allowing corporations to stay competitive in their industry. We expect control systems to improve information flows within the firm by allowing managers to better identify...

A firm's failure to protect and control confidential information is posited to affect its cost of debt. Using a sample of 199 cybersecurity breaches from 2005 to 2014, I find a positive association between a cybersecurity breach and a firm's cost of privately placed debt. Compared with loans...

This study examines the role of effective control systems in capturing corporate innovation. Although we expect effective control systems to improve information flows within the firm by allowing managers to better identify and patent their most valuable intellectual property, a priori this...

Prior research provides mixed evidence on whether corporate lobbying activities increase or decrease shareholder value. In this study we use detailed data on corporate lobbying expenditures to investigate which factors influence the returns to corporate lobbying activities. Specifically, we...