Using publicly available data from annual reports, we find that SEC rule changes (33-8128 and 33-8644) that impose time pressure on the audits of registered firms have a negative impact on earnings quality, which we interpret as evidence of lower audit quality. Consistent with our predictions,...

Conventional and commonly held wisdom with respect to the adoption of International Financial Reporting Standards (IFRS) is that they lead to improved financial reporting quality and comparability and thereby favorable economic consequences. There are however contradicting evidences disproving...

This study examines the incremental information in loss firms' non‐GAAP earnings disclosures relative to GAAP earnings. Using a large sample obtained through textual analysis and hand‐collection, we posit and find that loss firms' non‐GAAP earnings exclusions offset the low informativeness...

We examine asset sales as a method of real earnings management around the benchmarks of loss avoidance and last year's earnings. Evidence is reported of asset sales to boost or reduce earnings near the benchmark of last year's earnings. For the benchmark of zero earnings our results are...

This paper investigates whether U.S. regulatory actions around reverse mergers have exerted any spillover effects on the Chinese firms listed in China and whether Chinese firms have exhibited lower financial reporting quality than their U.S. counterparts. To test the possible spillover effect,...

Lobo and Zhou (2006) find an increase in accounting conservatism following the Sarbanes–Oxley Act of 2002. In Japan, the Financial Instruments and Exchange Act of 2006, the so-called Japanese Sarbanes–Oxley Act (J-SOX), was implemented for fiscal years ending on or after March 31, 2009....

This study focuses on the cross-sectional determinants of idiosyncratic crash risk. In specific, we verify the role of financial disclosure quality and internal corporate governance mechanisms associated with the board of directors, executive compensation and audit committee as buffers of crash...

We investigate whether managerial risk aversion, as measured by CEO political ideology, affects corporate decisions to undertake earnings management. Using a sample of 10,799 firm-year observations for S&P 1500 firms during the period from 1996 to 2008, we document that Republican CEOs, who tend...

Empirical research from the first years following SOX suggests that firms improve accruals quality following restatements, but both the number and materiality of restatements have declined since then. This decline may affect firms' responses to restatements and hence we re-examine whether...

Prior literature is mixed as to whether smoothing through accruals indicates higher or lower financial reporting quality (Tucker and Zarowin 2006; Jayaraman 2008; Dechow et al. 2010). Motivated by the unique inter-temporal features and reporting incentives of tax expense, we provide new evidence on this...