We examine whether the properties of earnings forecasts – bias and dispersion are different across periods when macroeconomic forecasts are optimistic than non-optimistic, and whether this difference in analyst forecast optimism is stronger during recessionary periods. We find that the...

The issue of asymmetric cost behavior has attracted significant interest in the managerial accounting literature. The literature has hypothesized that adjustment costs, particularly labor adjustment costs, play a significant and central role in driving empirically observed cost behavior...

We examine the impact of the Tax Cuts and Jobs Act’s (TCJA, also known as the “Trump tax cuts”) cap on the state and local tax (SALT) deduction on the relationship between municipal bond spreads and real estate tax revenues by examining California counties’ financial and municipal bond...

Using the principles of organizational economics, we assess the quality of the organizational architecture of the Public Companies Accounting Oversight Board (PCAOB). We use the Four Pillar Framework developed in Brickley, Smith, and Zimmerman (2000) to understand why—according to the SEC’s...

This paper examines the 2017 audit inspection scandal involving KPMG — one of the fewbreaches of “tone at the top” at a Big 4 audit firm — to study whether and how the scandal affectsKPMG and its clients. From the federal court trial related to the scandal, we construct a novel dataset...

The disclosure of non-GAAP (pro forma) earnings numbers by managers in the post-SOX era continues to attract attention from regulators, media, and researchers. However, there is limited empirical evidence on how auditors view clients that emphasize pro forma earnings over GAAP earnings. We study...