Contributing to the literature on stigma and re-legitimation, this paper examines two ways organizations may dampen the penalties associated with admissions of misconduct. Using a matched sample of firms reporting earnings restatements (141 single restating firms and 141 multiple restating...

We investigate how firms’ responses to misconduct change when the institutional environment becomes more stringent. Organizational theory offers conflicting perspectives on whether new legislation will increase or decrease pressure on firms to take remedial action following misconduct. The...

We explore how the Sarbanes–Oxley Act of 2002 created pressure for firms to take more visible and costly corrective action following the announcement of an earnings restatement. Building on theory about focusing events, the institutional effects of legislative change, and the agenda-setting...