A primary goal of both financial reporting research and audit research is to understand the determinants of quality, and researchers in both areas have identified a wide set of variables that enhance or impair quality. In this paper, we define financial reporting quality and audit quality and...

One objection to fair value accounting for liabilities is that changes in a company’s credit risk are recognized as gains or losses in a manner that is counterintuitive to the way gains and losses are typically interpreted (Lipe 2002). Specifically, when a company’s credit risk increases...

Despite the importance of audit committee independence in ensuring the integrity of the financial reporting process, recent research suggests that even when audit committees meet regulatory independence requirements, certain factors, such as undue influence by the CEO over the selection of the...

The rising prominence of fair values and other estimates (FVOEs) to financial reporting increases their significance to the audit. Based on inspections that report numerous deficiencies, the PCAOB is concerned that auditors are not sufficiently prepared for the challenges faced in evaluating...

This study examines the extent to which providing a course that emphasizes forensic accounting influences students skepticism and fraud-related judgments. We follow a cohort of students (trained students) who have enrolled in a forensic accounting course and examine their fraud judgments at...

This study investigates whether using hyperlinks that connect summarized financial graphs with detailed financial statement information reduces the effect of graphical distortions on nonprofessional investors' perceptions of firm performance. Using 385 participants from Amazon Mechanical Turk...

The IAASB maintains that expert assurance practitioners are unable to quantify limited assurance achieved for nonfinancial information and presumes users can read practitioner-customized procedure descriptions to differentiate information reliability between “inconsequential” and “high.”...

Fair values and other accounting estimates (FVOEs) are common in financial reporting (IAASB, 2009) and regulators are concerned that auditors are insufficiently skeptical in their evaluations of FVOEs (PCAOB, 2009, 2015a, b; IFIAR, 2014). Utilizing an experiment with auditors as participants, we...

Many companies fail to announce restatements in 8-K reports and/or in amended financial statement filings (10-K/As). This lack of disclosure leads some to question whether companies are intentionally attempting to hide restatements from shareholders or whether, given the conservative nature of...

This study investigates whether a shock to financial reporting has a differential impact on debt and equity markets. Using macroeconomic data and a pre-post design centered in 2005, we find that IFRS adoption has a significantly greater effect on foreign debt than on foreign equity investment...