In this paper we examine the effect of Enron, Andersen, and Sarbanes-Oxley on the fees paid by clients for their audits, and on the movement of clients from one auditor to another. As a percentage of total assets the average audit fee increased from 0.092 percent in 2000, the year before the...

Outside board chairs are more likely in firms that are smaller, have greater stock volatility and Ramp;D intensity, have a lower proportion of inside directors and less institutional ownership, and when CEOs have shorter tenure and lower ownership. We also find the existence of an outside chair...

This paper examines earnings management prior to stock option grants. Because the gain realized from a stock option is dependent on the difference between the exercise price determined on the stock option grant date and market price on the exercise date, management has the incentive to...

The release of the full set of financial statements in Form 10-Q provides investors with the data necessary to estimate the discretionary portion of earnings, thereby allowing them to better assess the integrity of reported quarterly earnings. We thus expect a negative association between...

Equity compensation provides incentives for executives to remain with the firm to avoid forfeiture of restricted shares and some or all of the value of stock options held. Empirically we show that the intrinsic value of unexercisable in-the-money options, the time value of unexercised options,...

SFAS No. 128, Earnings Per Share, changes the way publicly held companies measure and report earnings per share. It replaces primary earnings per share with basic earnings per share and fully diluted earnings per share with diluted earnings per share. The FASB's objectives were (1) to respond to...

The purpose of this study is to investigate whether and in what way adopting firms benefited from the pattern documented by Balsam et al. (1995) of reporting owners' equity increasing (decreasing) effects of mandated accounting changes in the income statement (balance sheet directly). If the...

Purpose – The purpose of this paper is to examine the motivations for and variations in terms of stock option modifications under Statement of Financial Accounting Standards (SFAS) 123(R). Stock options are used to motivate and retain employees. Unfortunately, when stock prices decline,...