We examine the association between financial restatement and firm value, based on a sample of firms that restated financial statement in Chinese listed firms between January 2005 and December 2009. Using Tobin's Q as a proxy for firm value in the end of restatement year, we find firm value in...

The paper investigates how auditor resignations affect capital market participants' perception of firms from which the auditors resign (quot;former clientsquot;) and of firms that continue as clients of the resigning auditor (quot;continuing clientsquot;). We find that resignation announcements...

This Essay examines the stock market's reaction to the Ninth Circuit's decision in re Silicon Graphics Securities Litigation. That decision adopted the most stringent interpretation of the Private Securities Litigation Reform Act's quot;strong inferencequot; standard for pleading scienter in...

The Sarbanes-Oxley Act of 2002 (SOX) proscribes so-called “affiliated hires” of financial executives. More specifically, SOX requires that firms wait at least one year before hiring an individual recently employed as a member of the firm’s external audit team. The intent of the regulation...

We provide evidence on the long standing concern on auditor conflicts of interest from providing non-audit services (NAS) to audit clients by using rarely explored NAS fee data from 1978-80 Using this earlier setting, we find cross-sectional evidence of improved earnings quality when auditors...

Corporate-level fraudulent activity has instilled a state of concern and heightened awareness in investors, the media and employees alike as perceived sensitivity to illegal behavior continues to increase. With corporate giants such as Enron, Tyco and Health South being prime examples of this...

This paper summarizes the Statement on Auditing Standards (SAS) No. 106 – Audit Evidence. It extends the importance on why the financial statements should be fairly stated and in conformity, in all material respects, with Generally Accepted Accounting Principles (GAAP). Also, extends why audit...

The recent financial crisis has led to a vigorous debate about the pros and cons of fair-value accounting (FVA). This debate presents a major challenge for FVA going forward and standard setters' push to extend FVA into other areas. In this article, we highlight four important issues as an...

Dozens of judicial opinions have held that shareholders own corporations, that directors are agents of shareholders, and even that directors are trustees of shareholders' property. Yet, until now, it has never been proven. These doctrines rest on unsubstantiated assumptions. In this book the...

This study examines whether auditors can effectively use nonfinancial measures to assess the reasonableness of financial performance and, thereby, help detect financial statement fraud (hereafter, fraud). If auditors or other interested parties (e.g., directors, lenders, investors, or...