We examine merger and acquisition (M&A) transactions in which the acquirer and the target share a common auditor. We predict that a common auditor can help merging firms reduce uncertainty throughout the acquisition process, which allows managers to more efficiently allocate their capital,...

In this paper, we develop a framework for evaluating the impact of conservative accounting on the structure of residual income models of equity valuation. We explore specific examples of both unconditional and conditional conservatism and observe a common mathematical structure. We proceed to...

In this study we examine the effect of auditor economic bonding (financial dependency on a client) on audit quality. We consider financial dependency as either abnormally high fees in relation to expected hours or vice versa. We consider audits to have credence goods properties where the client...

The IFRS adoption has improved the quality of accounting information significantly. However, huge costs are incurred by all subjects involved. The process has considerable consequences for tax systems, too. State authorities are solving how to ensure the control over tax duty fulfillment under a...

We examine the effect of open market share repurchase announcements on prices of traded loans and find a significant wealth transfer effect; the change in the market value of equity is inversely related to the change in the market value of loans. We find that loan abnormal returns are more...

The article considers in detail the problems of formation of financial results of the organization's accounting and tax accounting. Existing differences on many issues lead to economically unjustified disparity of outcomes of the income statement

In two experiments, this study examines the effects of current and expanded analyst ownership disclosure on nonprofessional investors' confidence in analyst recommendations and on the amount invested by nonprofessionals. Experiment one examines how nonprofessional investors interpret analyst...

In this study, we examine how norms about the use of negotiation strategies by different parties in an auditor-client negotiation influence the relative efficacies of these negotiation strategies. We conduct an experiment with experienced auditors/financial managers as participants, who enter...

This study aims to analyze the predictive power of current accruals and cash flows for future earnings and how IFRS adoption have affected this power, for general firms and for firms with relative higher and lower levels of accruals. Using a sample of 10 countries that have adopted IFRS in 2005,...

Prior literature documents the usefulness of DuPont disaggregation for many applications such as predicting firms' future profitability, operating income, analysts' forecast errors, and stock market returns. At the same token, researchers also emphasize the impact of earnings quality for...