Arguably, governance and forensic accounting metrics should be predictors of future stock returns. Do empirical tests confirm this view? This article describes the logic and analytics used to calculate a metric called the Forensic Alpha Model (FAM), which was then used to test the hypothesis...

We argue that accounting conservatism makes earnings forecasting difficult by introducing transitory components in reported earnings. These transitory components are likely to be disproportionately represented in firms reporting losses. We show that analysts' mean forecast errors and absolute...

To effectively manage audit risk, auditors must anticipate potential litigation and reputation consequences associated with inaccurate accounting estimates. Our paper examines whether auditors correctly anticipate these consequences. We provided 57 manager- and partner-level auditors with case...

The subject of evaluating the ability of companies to continue in its activity or financial failure in the future is one of the important topics dealt with by academic and professional studies by universities and professional accounting and auditing organizations, especially after the collapses...

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...

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...