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...

Studies show that incumbents reduce prices in response to higher entry threats in consumer industries. We provide new insights on the importance of an incumbent firm's reputation to the limit-pricing decision by examining a professional service industry where the supplier's reputation serves as...

Using a shock to the Chinese capital market and unique and detailed audit-adjustment data, this paper investigates the effect of a capital-market liberalization program on auditors' adjustments to their clients' financial reports. Employing difference-in-differences tests with propensity-score...

This paper studies whether and how Big-4 firms provide higher quality audits than non-Big-4 firms. Specifically, we first examine a Big-4 effect and then explore three sources of the Big-4 effect. To test the Big-4 effect, we use a unique dataset of individual audit partners for a large sample...