A primary goal of both financial reporting research and audit research is to understand the determinants of quality, and researchers in both areas have identified a wide set of variables that enhance or impair quality. In this paper, we define financial reporting quality and audit quality and...

This paper proposes and tests a new risk model that explains how investors perceive financial risks. The model combines conventional decision theory variables - probabilities and outcomes - with variables from psychology research by Slovic (1987). The latter includes variables such as the extent...

Psychologists have studied human behavior for over a century and, as a result, have developed a robust set of theories regarding how people behave. Most financial accounting issues deal with matters of human behavior, such as the judgments and decisions of managers, investors, analysts, and...

To effectively manage audit risk, auditors must correctly predict the potential litigation and reputation consequences associated with inaccurate accounting estimates. Accurate predictions are critical because underestimation of negative consequences leads to excess legal exposure and...