We examine audit fees and returns to auditor reputation for Israeli entrepreneurs making initial public offerings (IPOs) of equity in U.S. capital markets. We find that the cost of audit quality in terms of audit fees is higher, and the benefit of audit quality in terms of IPO proceeds is lower...

We examine the issue of endogeneity in government accounting research. Estimation bias and inconsistency can arise when single equation estimation includes an explanatory endogenous variable. We discuss the modeling and estimation issues involving endogenous explanatory variables and we...

We find that the level of environmental GAAP disclosure is associated with profitability, and that this level of environmental GAAP disclosure is relevant to investors, We also find that the effect of profitability on the level of environmental GAAP disclosure, and the effect of the level of...

We propose that regulation increases the demand for industry-expert auditors. We hypothesize that this increase in demand will be reflected in the degree of reliance investors place on financial information certified by industry-expert auditors. We evaluate the return-earnings relation for...

In 2001 the Financial Accounting Standards Board issued FAS 141 Business Combinations, and FAS 142 Goodwill and Intangible Assets. These new accounting standards significantly changed the accounting for mergers and acquisitions, dramatically altering how business combinations are reflected in...

In 2001 the Financial Accounting Standards Board issued FAS 142 Goodwill and Intangible Assets, which expanded the accounting guidance for intangible assets. These changes were particularly significant for companies in industries that rely heavily on intellectual capital to generate future cash...

Using a system of three simultaneous equations, we test the predictions of Datar, Feltham, and Hughes 1991 and Hughes 1986 between auditor choice, earnings disclosures, and retained ownership in U.S. firms making initial public offerings of securities. Using a sample of initial public offerings...

In this paper I review the literature and discuss the current state of affairs in marketbased accounting research with respect to the Efficient Markets Hypothesis (EMH). Empirical documentation of the post-earnings announcement drift anomaly seems to have formalized a crisis for the efficient...

The Sarbanes-Oxley Act of 2002 brought wide spread changes to financial reporting. Companies now must report on internal control deficiencies. There are criminal penalties for false certification of financial reports. The new Public Company Accounting Oversight Board was established. And audit...