This study explores close U.S. congressional elections involving politicians who have influence over the SEC to examine the effect of firms’ political connections on their financial reporting. This question is important in understanding the overall effect of political connections on financial...

Prior research provides mixed evidence about whether sufficient audit market competition exists and whether competition impairs or improves audit quality. A major impediment to this stream of research is the unobservable nature of the bidding process by which auditors compete for clients. In...

We show that measures of business text sentiment are highly affected by transitory events. These transitory events lead to a strong positive association between sentiment and contemporaneous earnings. However, the association between sentiment and future earnings is insignificant. We develop a...

This study examines the role of media coverage on meritorious shareholder litigation. Asserting a causal effect of the media on litigation is normally difficult due to the endogenous nature of media coverage. However, we use the Wall Street Journal’s backdating coverage to overcome these...

Most accounting studies use only public enforcement actions (SEC cases) to measure accounting fraud. However, private cases (securities class actions) also play an important enforcement role. We discuss the legal standards and processes for both public and private enforcement regimes, emphasize...

This study introduces a new measure of ex ante litigation risk using scrutiny of SEC filings by the source of securities litigation—plaintiffs' lawyers—to reduce measurement error, relative to existing measures. We show that plaintiff-lawyer views proxy for the largely unobservable factors...

It is unclear how investors can quickly impound information from litigation filings given frictions to obtain the filings and interpret their complex legalese. However, specialized media members have expertise and ability to obtain filings and report on their content. We isolate the media’s...