We assess the stock market reaction to proposals of incentive plans for directors in a sample of 289 firms. We note a reaction that is both economically and statistically insignificant. This result suggests that shareholders do not necessarily benefit from the adoption of such plans. Across...

We assess the stock market reaction to proposals of incentive plans for directors in a sample of 289 firms. We note a reaction that is both economically and statistically insignificant. This result suggests that shareholders do not necessarily benefit from the adoption of such plans. Across...

A unique feature of Chinese auditing and one under consideration for adoption in the U.S. is regulatory oversight of individual auditors. This paper analyzes enforcement actions by the China Securities Regulatory Commission (CSRC) against engagement auditors and investigates whether audit...

The prior literature indicates that financial policy (e.g., payout policy) as well as accounting policy (e.g., conservatism) can be used to address incentive problems in firms but finds mixed evidence. We conjecture that stock repurchases, an increasingly popular form of payout, and conservatism...

We examine the impact of the corporate information environment on short selling by testing the relationship between short interest and accounting conservatism. Short interest, the total number of shares shorted and not yet covered, is a widely used measure of short selling activity. Accounting...

This study examines the impact of auditor quality on debt covenants. We conjecture that high-quality auditors have two related effects on debt covenants: (i) they encourage fewer and less restrictive covenants by providing assurance to lenders at contract inception and, consequently, (ii) they...