Experimental research in accounting provides extensive evidence that auditors' judgments are negatively affected by the use of heuristics. However, there is little research investigating whether the negative effects of using heuristics manifest in practice and survive the quality control...

Economic theory suggests that demand uncertainty should influence producer behavior. In this study, we empirically examine the impact of demand uncertainty on the production of audit services. Auditors must make resource allocation decisions in advance of exact demand being known, and because a...

Ex ante misstatement risk confounds nearly all settings relying on restatements as a measure of audit quality, but researchers continue to debate how to effectively control for this construct. In this study, we consider a recent approach that involves controlling for prior period restatements...

Prior research finds that mandatory risk factor disclosures are informative in that they increase investors' assessments of the volatility of a firm's cash flows. However, the literature is silent as to whether these disclosures provide information about the level of future cash flows and,...

Prior research establishes that boards of directors can encourage risk-averse managers to take risky actions by providing stock options and severance pay. We demonstrate that the ability of these incentives to encourage risk-taking hinges on the level of uncertainty facing the manager, and that...