In this study, we examine a setting where over-reliance on structured materiality guidance leads to less appropriate materiality assessments by auditors, and investigate whether a justification requirement in the absence of accountability mitigates this effect. Results from our experiment show...

In this study, we examine whether buy-side analysts' forecasts are biased when they cover stocks that are held by the mutual fund. Specifically, we conduct an experiment with buy-side analysts and fund managers where we manipulate whether the forecasts are released to colleagues and clients or...

Conference calls are a common way for firms to disseminate information to investors and analysts. We use controlled experiments to examine, in the context of the question and answer segment of conference calls, whether investors' investment judgments are jointly influenced by a CEO's use of...

Recent studies document that market participants react positively to the positive language sentiment or tone embedded in financial disclosures, and that investors' reactions to negative news are more muted with poor disclosure readability. However, while language sentiment and readability...

This study investigates the effects of lead auditors' technical and managerial knowledge on audit quality and audit fees. The German institutional environment enables us to track auditors over their careers and measure their various personal attributes. We find that lead auditors' technical...

Recent studies on whether the provision of non-audit services impairs audit quality document mixed results, depending on the proxy for auditor quality used. We posit that the effect of non-audit fees on audit quality is conditional on auditor industry specialization in that audit quality is less...

We investigate factors that may influence auditors' overconfidence in other auditors' technical knowledge. We conducted an experiment using natural teams comprising audit seniors and managers. We find that audit managers' (seniors') overconfidence in audit seniors' (managers') technical...

An implicit assumption of prior literature on strategic behavior of auditors is that auditors know the preferences of their colleagues. In this study, we conduct an experiment to investigate the validity of this assumption. In our experiment, we match a manager with a pair of top and mediocre...

We conduct an experiment to examine the effects of guidance frequency (frequent versus infrequent) and guidance goal (accuracy versus meet/beat versus truthful) on managers' operating decisions. We find that frequent guiders sacrifice total earnings for quarterly earnings predictability...