United States tax law distinguishes between short-term and long-term capital gains. By taxing long-term gains at a lower rate the law creates an incentive for investors to postpone the realization of short-term gains. This study examines the lock-in effect induced by the differential tax...

We investigate whether management's decision regarding the recognition of the valuation allowance for deferred tax assets (VA) under ASC 740 provides incremental information about the persistence of accounting losses. We introduce a classification scheme that assigns loss firm-years into three...

We exploit differences in litigation concerns combined with similarities in reputational concerns across two attest service types (comprehensive annual audits and limited interim reviews) to assess litigation-based and reputation-based theories of assurance quality. We contend that because the...

We investigate whether management's decision regarding the recognition of the valuation allowance (VA) for deferred tax assets provides incremental information about the persistence of accounting losses. We introduce a classification scheme that assigns loss firm-years into three categories...

It is generally recognized that decisions about capital projects should be made by independent reviewers who select the economically strongest projects. However, prior research finds that reviewers' choices can be biased by their affective reactions to a manager proposing a capital project....

Audit firms increasingly rely on audit approaches using data and analytics (D&A) tools but express concern that external reviewers will excessively scrutinize such approaches. We conduct two experiments in which experienced external reviewers conduct an engagement review. We manipulate whether...

This paper reports the results of an experiment examining financial statement users' earnings correction beliefs about the discovery of a quantitatively immaterial earnings misstatement by the auditor. The SEC contends that companies are reluctant to correct such misstatements when the...