We examine how Big N auditors' changing incentives impact their comment-letter lobbying on U.S. GAAP over the first thirty-four years of the FASB (1973-2006). In particular, we focus on the influence of auditors' lobbying incentives arising from two basic factors: managing expected litigation...

Accuracy and consistency are critical for inspections to be an effective, fair, and useful tool for assessing risks, quality, and suppliers — and for making decisions based on those assessments. We examine how inspector schedules could introduce bias that erodes inspection quality by altering...

We examine the lobbying behavior of state governments and their financial statement users in the development of public pension accounting standards GASB 67 and 68. We find that states' opposition to liability increasing provisions is increasing in the severity of pension plan underfunding,...

I examine the extent to which the FASB’s agenda determination is a function of the contemporaneous priorities expressed by its primary constituents: auditors, preparers, and financial statement users. Using the FASB’s consultation with the FASAC as a lens through which to view constituent...

We provide a comprehensive overview of shareholder litigation against auditors since the passage of the PSLRA. The number of lawsuits per year has declined, dismissals have increased, and settlements in recent years have declined. Our study asks why. Because we find that the likelihood an...

We provide fresh evidence regarding the relation between compensation consultants and CEO pay. First, firms that employ consultants have higher-paid CEOs—this result is robust to firm fixed-effects and matching on economic and governance variables. Second, while this relation is partly due to...

Multinational corporations (MNCs) hire auditors to assess business partners’ compliance with quality, working conditions, and environmental standards. Independent third-party auditors are widely assumed to outperform second-party auditors employed and thus controlled by MNCs. However,...

Based on extant literature, we review the positive theory of GAAP. The theory predicts that GAAP's principal focus is on control (performance measurement and stewardship) and that verifiability and conservatism are critical features of a GAAP shaped by market forces. We recognize the advantage...

We study conference calls as a voluntary disclosure channel and create a proxy for the time horizon that senior executives emphasize in their communications. We find that our measure of disclosure time horizon is associated with capital market pressures and executives' short-term monetary...

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...