The primary objective of this study is to construct a valid and reliable instrument to quantitatively measure the quality of internal audit function via level of conformance by internal auditors towards the International Professional Practice Framework (IPPF). Two separate pilot tests were...

This paper explores how accounting disclosures can be combined with regulatory disclosures to refine existing concepts of free cash flows to equity (FCFE) for financial institutions. The resulting measure is designed to promote market discipline by helping investors distinguish among capital...

In the period following the global financial crisis high profile regulatory breaches and other instances of banks' misconduct triggered widespread concern that the culture and standards of conduct in banks had declined to a point of unacceptability. The crisis also brought into sharp focus the...

This paper develops a measure of disclosure investment strategy using data envelopment analysis (DEA) to apply a production formulation to firms' investments in mandatory and voluntary disclosures. Conceptually, the “disclosure production” of a firm consists of a variety of disclosure...

This paper investigates whether greater competition increases or decreases individual bank and banking system risk. Using a new text-based measure of competition, and an instrumental variables analysis that exploits exogenous variation in bank deregulation, we provide robust evidence that...

Auditors increasingly employ technologies to improve audit quality. Using a design science approach, we examine whether using drones and automated counting software can improve audit quality and thereby improve financial reporting. We assess three dimensions of audit quality—efficiency,...

How should a firm measure a productive asset used as collateral in a credit agreement? To answer this question, we develop a model in which firms borrow funds subject to collateral constraints. We characterize the qualities of optimal asset measurements and analyze their interactions with...

This paper investigates whether greater competition increases or decreases individual bank and banking system risk. Using a new text-based measure of competition, and an instrumental variables analysis that exploits exogenous variation in bank deregulation, we provide robust evidence that...

We use two sets of customer satisfaction measures obtained from a homebuilding company to examine the effect of measurement timing on the association between customer satisfaction measures and future financial performance. The research site employs two separate consulting firms that measure...

When investors have limited attention, does the way in which net income is measured matter for firm value and firms’ resource allocation decisions? This paper uses the Accounting Standards Update (ASU) 2016-01, which requires public firms to incorporate changes in unrealized gains and losses...