We review recent behavioral studies of the effects of regulation on earnings management and accounting choice. Our review examines the impact of financial reporting, auditing, and other corporate governance regulations on the beliefs and choices of managers, auditors and corporate directors....

In this paper, we examine the growing number of behavioral studies of how financial reporting, auditing, and other corporate governance regulations affect earnings management and accounting choice-related decisions of managers, auditors, and directors. We first describe how experimental and...

Market regulators are concerned about the completeness of management-provided explanations in financial reports and other venues. In particular, the Securities and Exchange Commission has articulated the growing problem of firm managers selectively emphasizing information that is favorable to...

This paper shows that an important link between investor sentiment and firm overvaluation is optimistic earnings expectations, and that management earnings guidance aids in resolving sentiment-driven overvaluation. Using the firm characteristics identified by Baker and Wurgler (2006), we find...

Prior research argues that sequential decisions lead to a slippery slope toward unethical or fraudulent behavior, with little evidence to support such claims. We conduct two experiments which demonstrate the existence of the slippery slope in a controlled setting, and investigate how it leads...

This paper shows that an important link between investor sentiment and firm overvaluation is optimistic earnings expectations, and that management earnings guidance aids in resolving sentiment-driven overvaluation. Using the firm characteristics identified by Baker and Wurgler (2006), we find...

A substantial body of prior research investigates how skills and attributes of upper management affect firm policies and performance, but the impact of workers outside of upper management has received little attention due to scarcity of data involving lower-level workers. We propose that...

Prior literature finds that short selling is beneficial to the market because it increases liquidity and helps to discipline optimistic market prices. In this paper we use two controlled experiments to examine the potential for an unintended consequence of allowing short selling or easing short...

This paper replicates the results of the survey of experienced executives reported in Section IV of Seybert (2010). Seybert retracted the survey data from the originally published article due to concerns about the source of the data. I survey 79 experienced executives to elicit their beliefs...

We investigate the effect of CFO narcissism, as measured by signature size, on financial reporting quality. Experimentally, we validate that narcissism predicts misreporting behavior, and that signature size predicts misreporting through its association with narcissism. Empirically, we examine...