We explore the relationship between managerial incentives and environmental harm. We find that high-powered executive compensation packages can increase the odds of environmental law-breaking by 40-60% and the magnitude of environmental harm by over 100%. We document similar results for the...

The prevention of wrongdoing, both civil and criminal, is a growing preoccupation of businesses. The academic study of such compliance and potential wrongdoing is also a growth industry. However, much like a decentralized firm with various subunits that do not communicate efficiently with each...

We examine the effect of auditor conservatism on corporate innovation. We hypothesize that because conservative auditors constrain income-increasing accounting discretion, managers may sacrifice long-term investments in innovation to boost current earnings and meet short-term performance...