Events leading up to the implementation of the Sarbanes-Oxley Act of 2002 (SOX) increased the public's focus on corporate governance and increased regulatory scrutiny of corporate governance mechanisms. These events also contributed to a massive restructuring in the audit market which resulted...

When public firms collapse amid allegations of financial information failure - such as misleading financial statements - society looks beyond the role of accountants to see who else should be held responsible. Lawyers advising the firm increasingly are charged with responsibility, perhaps...

This paper is the first in a two part series on conservatism in accounting. Part I examines alternative explanations for conservatism in accounting and their implications for accounting regulators. Part II summarizes the empirical evidence on conservatism, its consistency with alternative...

Recent research documents that common law countries have stronger investor protection laws and more developed financial markets than civil law countries (La Porta et al., 1997, 1998). This line of inquiry is extended in our study to examine if variations in legal systems also affect accounting...

The role of quot;gatekeepersquot; as reputational intermediaries who can be more easily deterred than the principals they serve has been developed in theory, but less often examined in practice. Initially, this article seeks to define the conditions under which gatekeeper liability is likely to...

This study provides evidence on the restatement circumstances associated with lawsuits against auditors. We examine restatements of financial statements previously issued to the public and filed with the SEC by 416 US companies that announced restatements from 1995 to mid-1999. Our examination...

We provide evidence on the long standing concern on auditor conflicts of interest from providing non-audit services (NAS) to audit clients by using rarely explored NAS fee data from 1978-80. Using this earlier setting, we find cross-sectional evidence of improved earnings quality when auditors...

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...

This paper offers new findings on the relation between auditor dismissals and resignations and audit fees. Unlike the prior research, which studies the fees of auditors after an auditor change, we focus on audit fees before an auditor change. Our evidence shows that incumbent auditors charge...

In the wake of the collapse of Enron and Andersen, several questions were raised about Enron's accounting and the behavior of its auditor. An important question is whether ex-Andersen's clients received more conservative treatment by their new auditors, either due to a greater perceived...