This study finds that the agency problems of companies with high free cash flow (FCF) and low growth opportunities induce auditors of companies in the United States to raise audit fees to compensate for the additional effort. We also find that high FCF companies with high growth prospects have...

Studying the determinants of management forecast precision is important because a better understanding of the factors affecting management’s choice of forecast precision can provide investors and other users with cues about the characteristics of the information contained in the forecasts. In...

We examine the relation between disclosure tone and shareholder litigation to determine whether managers’ use of optimistic language increases litigation risk. Using both general-purpose and context-specific text dictionaries to quantify tone, we find that plaintiffs target more optimistic...

In this paper, we study a sample of companies that fail to remediate previously-disclosed material weaknesses (MWs) in their internal control systems and thus disclose the same MWs in two consecutive annual reports. Their failure to remediate is surprising given that regulators, credit rating...

At the beginning of the 1990s UK accounting standards were described as a ‘laughing stock’. By the millennium they were widely acclaimed and in some respects world-leading. This paper explores some of the key technical advances in this period, and the political processes employed to secure...

Regulation A (Reg A) offerings provide an alternative way for companies to raise capital from the public without undergoing the full registration and reporting requirements of a traditional initial public offering. To ensure that investors are fully informed about the investment opportunity, Reg...

We investigate the impact of FINRA 2241 on market quality. We find that FINRA 2241's impact on each of ten systematic and objective market quality metrics - the analyst behavior indices of diligence, objectivity, quality, and accuracy, based on Bhattacharya and Gupta (2023), and six measures of...

Understanding of the economic impacts of SEC investigations is limited because investigations are unobservable unless they are publicly disclosed or lead to enforcement actions. We investigate the real economic effects of SEC investigations using the merger and acquisition (M&A) setting because...

The competitive target pay policy sets a target dollar number for total CEO compensation within a specified range of the amounts paid to a CEO’s peers chosen from similar sized firms in the same industry. If such a policy were widely adopted by compensation committees, we would observe a...

We study the effect of shareholder litigation rights on CEO turnover policies using U.S. states’ staggered adoption of Universal Demand laws, which restrict shareholder lawsuits that allege a breach of fiduciary duty by directors or managers. We document that reduced shareholder litigation...