We analyze whether information asymmetry affects three major aspects of the audit process using an instrumental variables research design that exploits exogenous increases in information asymmetry stemming from brokerage house mergers and closures. Consistent with our predictions, we find that a...

We study the relation between audit committee accounting expertise, analyst following, and market liquidity. Our main results indicate that analyst following increases subsequent to the appointment of an accounting expert to the audit committee. We also provide evidence that accrual quality, as...

We investigate whether firms' tax planning affects the accuracy of analysts' forecasts. Tax planning can exacerbate the complexity of firms' operations through strategic choices to exploit tax laws. Because of its effect on firms' operations, tax planning can influence analysts' efforts to...

Prior studies examining the interactions of auditors and analysts have generally focused on how auditors influence analysts' forecasts or audit clients' behavior relative to those forecasts without considering how analysts might influence auditors. However, auditing standards encourage auditors...

This study explores whether sell-side analysts recognize firms' going-concern (GC) difficulties, and whether and how they report going-concern uncertainties to investors. We show that analysts are aware of impending firm going-concern problems on the basis of their tendency to downgrade their...

While inputs into analysts' valuation models have been documented (Brown et al. 2015), analysts' prior perceptions of reported financial statement items have not yet been studied. It is important to be aware of analysts' perceptions of the current accounting standards because they are, to some...

This paper examines the association between auditor's independence and financial analysts' forecast revisions in the specific case of goodwill impairment testing. Using a sample of 1,247 firm-year observations representing 177 firms listed on the CAC All-Tradable (the former SBF 250) over the...

We examine whether financial analysts’ questions during earnings conference calls can help auditors assess the quality of firms’ internal control over financial reporting. We argue that financial analysts’ expertise on firm external factors complements auditors’ private knowledge on firm...

The primary research purpose of this study is to identify the most popular valuation models that analysts use to derive their target prices for firms with going-concern issues.The study conducts a structured content analysis of both auditors’ and analysts’ reports for a sample of UK-listed...

Understanding and the interpretation of financial statements is an important factor for economic entities, for making the right decisions. Nowadays, more and more is noticed the general tendency of the harmonization of the Directive IV of the European Committee with International Financial...