Capitalization of software research and development costs (SDC) under SFAS No. 86 is the only exception to SFAS No. 2 which calls for immediate expensing of R&D costs. Although intangible assets have become increasingly relevant for firm valuation, they remain largely unexplored in audit...

While auditor attestation of the effectiveness of internal control over financial reporting (ICFR) is required for firms with a public float of at least $75 million (accelerated filers), the SEC has delayed auditor attestation for non-accelerated filers several times. The Dodd-Frank Act of 2010...

We conduct a comprehensive study on the associations between debt covenant violations (“violations”) and auditor actions for financially distressed and non-distressed firms. Our study is motivated by a lack of research on the consequences of violations resulting from auditors' actions. We...

This paper examines whether book-tax differences help explain audit fees. By attesting to the fair representation of financial information, auditors are an important intermediary in financial statement users' trust and understanding of financial information. Our evidence that large book-tax...

Despite the obvious impact of the CFO and the CEO on a firm's financial statements, there is limited empirical evidence on whether and how the personal characteristics of senior management are associated with earnings management. We provide empirical evidence on the relation between earnings...

Recent research challenges the notion that the Big 4 auditors provide a higher quality audit relative to non-Big 4 and suggests that the Big N effect could be due to self-selection. We contribute to this debate by controlling for pre-audit earnings quality, an important omitted variable in prior...

We examine the role of investment opportunities as a determinant of the relative importance of cash flows from operations (CFO) and accruals in firm valuation. We find that at low investment-opportunity levels, CFO value-relevance increases with investment opportunities. When investment...

This study investigates the link between audit quality and the market's perception of the value of discretion in accounting for Ramp;D costs (Australian GAAP permits Ramp;D costs to be capitalized) and the impact of changes in that discretion. The study examines companies reporting of...

The Sarbanes-Oxley Act mandates the disclosure of whether at least one member of the audit committee is a financial expert. However, the final version of the rule adopted by the SEC defined experts to include both accounting and non-accounting experts. Did the SEC do the right thing? Are the...

For stakeholders, such as investors and lenders, to appropriately assess a company's financial performance, the reported accounting earnings must closely reflect the economic reality of the organization's financial activity throughout the reporting period. The degree to which reported earnings...