The ultimate objective of financial reporting is to provide transparent financial statements and disclosures that meet the informational needs of investors and other users of financial statements. One of the primary goals of the Sarbanes-Oxley Act (USHR 2002) is to provide more reliable...

This paper studies the influence of conditional conservatism on the auditor resignations, and more importantly, the impact of corporate governance on this relationship. The existing literature has provided evidence on the existence and pervasiveness of accounting conservatism, such as...

When there is high information asymmetry between directors and managers, independent directors do not have enough information to perform their functions. Only when faced with a good internal information environment can such directors acquire enough information to provide advice and monitor...

This study empirically evaluates the impact of the Private Securities Litigation Reform Act of 1995 (PSLRA) and the Sarbanes Oxley Act of 2002 upon the (equity) risk of the largest US firms, the backbone of the US economy. Drawing from the literature, hypotheses are developed and empirically...

The auditor's internal control report format prescribed by the Auditing Standards Board (ASB) and the Public Company Accounting Oversight Board (PCAOB) includes a limitations paragraph. This study examines the impact of a limitations paragraph on users' and auditors' perceptions about...

This paper introduces internal control quality to study litigation risk which enrich the literature of how to reduce firms' litigation risk. This paper use listed company data from 2000-2015 in China A-share market to research how firms' internal control affect litigation risk, and which kind of...

We examine the relation between low quality internal controls and audit fee premiums. Using a novel dataset of audit hours and audit fees we find, consistent with the audit risk model, that auditors increase their effort (hours) due to low internal control quality. We find that auditors also...

Proposals for increased transparency and disclosure within audit reports are consistently met with conflict. Some suggest that auditor disclosures increase liability exposure for auditors, and should be the responsibility of management. Others suggest that such disclosures are beneficial to the...

This study examines three research questions. First, did accrual reliability improve in the post-SOX period? Second, do companies receiving higher-quality audits report accruals that are more reliable? Third, did the degree of SOX-related improvement in accrual reliability vary across companies...

Auditors play a major role in corporate governance and capital markets. Ex ante, auditors facilitate firms' access to finance by fostering trust among public investors. Ex post, auditors can prevent misbehavior and financial fraud by corporate insiders. In order to fulfill these goals, however,...