This paper proposes and tests a new risk model that explains how investors perceive financial risks. The model combines conventional decision theory variables - probabilities and outcomes - with variables from psychology research by Slovic (1987). The latter includes variables such as the extent...

Psychologists have studied human behavior for over a century and, as a result, have developed a robust set of theories regarding how people behave. Most financial accounting issues deal with matters of human behavior, such as the judgments and decisions of managers, investors, analysts, and...

To effectively manage audit risk, auditors must correctly predict the potential litigation and reputation consequences associated with inaccurate accounting estimates. Accurate predictions are critical because underestimation of negative consequences leads to excess legal exposure and...

Many companies fail to announce restatements in 8-K reports and/or in amended financial statement filings (10-K/As). This lack of disclosure leads some to question whether companies are intentionally attempting to hide restatements from shareholders or whether, given the conservative nature of...

This study investigates whether a shock to financial reporting has a differential impact on debt and equity markets. Using macroeconomic data and a pre-post design centered in 2005, we find that IFRS adoption has a significantly greater effect on foreign debt than on foreign equity investment...

This study explores the factors associated with companies' regulatory filing choices surrounding the restatement of previously filed financial statements. Companies have three regulatory filing alternatives of decreasing transparency: file an 8-K report, file an amended report, or restate the...