Relying on their history of legal infractions to measure individuals' risk tolerance, we examine the association between engagement partners' risk appetites and audit quality in the U.S. Criminology and economics research links criminal activity with enduring personality traits that capture an...

We analyze the impact of cross-audits between companies and mutual funds on auditors' reporting decisions. We document that companies are more likely to receive favorable audit opinions when they appoint the same auditor as their mutual fund blockholders. In cross-sectional evidence consistent...

We examine the impact of auditor choice on debt pricing in firms' early public years when they are lesser known. Our evidence suggests that retaining a Big Six auditor, which can reduce debt monitoring costs by enhancing the credibility of financial statements, enables young firms to lower their...

We extend research on the determinants of corporate tax avoidance to include the role of Internal Revenue Service (IRS) monitoring. Our evidence from large samples implies that U.S. public firms undertake less aggressive tax positions when tax enforcement is stricter. Reflecting its first-order...

We analyze the importance of Internal Revenue Service (IRS) monitoring to equity pricing in U.S. public firms. Our evidence from large samples implies that equity financing is cheaper when the probability of an IRS audit is higher, enabling investors to learn more about the firm. Reflecting its...

We examine the role and economic consequences of emotions in influencing the judgment of corporate executives. Analyzing a large sample of U.S. public firms, we find that sunshine-induced good mood leads managers to make upwardly biased earnings forecasts. Importantly, our evidence implies that...

We examine the role that political-economic factors play in shaping financial analyst bias using a series of scheduled provincial elections in China. Theory on political business cycles holds that, in a short period prior to these political events, provincial politicians have stronger incentives...

We document that firms held by mutual fund managers who worked in public accounting earlier in their careers exhibit higher quality financial reporting. In cross-sectional evidence consistent with expectations, we find that the role that fund manager public accounting experience plays is...

We examine whether managers’ activities in striving to reach earnings targets affect their firms’ product quality. We find that firms suspected of manipulating real activities in trying to meet earnings benchmarks exhibit a higher likelihood and frequency of product recalls. Other evidence...