Accounting comparability refers to the similarity with which similar economic events are reflected in the accounting choices of firms. Accounting comparability facilitates understanding and hence learning from peer firm disclosures. Using a sample of 8,685 observations for 588 unique firms, we...

Using a sample of cross-country observations, we examine the impact of the implementation of country-by-country reporting (CbCr) by the European Union in 2016 on audit fees. We posit that on one hand increased tax transparency increases both firms’ demand for audit effort to better support the...

Mafia firms introduce distortions in the markets in which they operate, increasing the cost of doing business for peer firms. We investigate whether peers respond by increasing their tax avoidance and thus increasing funds available to compete with the Mafia firms. Using a sample of Italian...

The recent financial crisis has led to a major debate about fair-value accounting. Many critics have argued that fair-value accounting, often also called mark-to-market accounting, has significantly contributed to the financial crisis or, at least, exacerbated its severity. In this paper, we...

We provide a novel benefit of "Alternative Risk Transfer" (ART) products with parametric or index triggers. When a reinsurer has private information about his client’s risk, outside reinsurers will price their reinsurance offer less aggressively. Outsiders are subject to adverse selection as...

Insurance contracts are often complex and difficult to verify outside the insurance relation. We show that standard one-period insurance policies with an upper limit and a deductible are the optimal incentive-compatible contracts in a competitive market with repeated interaction. Optimal group...

I review new empirical evidence from the recent financial crisis on the relation between financial reporting and financial stability. I draw the following conclusions: First, there is still no evidence that fair value accounting caused widespread fire sales of asset or contagion. Second, the...