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...

This paper examines how the U.S. Securities and Exchange Commission (SEC) intervention in 2003 regarding non-GAAP disclosures affects the reporting of Funds from Operations (FFO), an industry-guided non-GAAP performance measure commonly reported by Real Estate Investment Trusts (REIT). We find...

The existing literature on audit opinion shopping provides inconsistent evidence on whether such shopping has any association with abnormal audit fees. In this paper, we hypothesize that firms engage in audit opinion shopping and pay an abnormal audit fee only when their degree of accounting...

We investigate consequences of tax-related material weaknesses in firms’ internal controls over financial reporting. We hypothesize that the presence of internal control material weaknesses (i.e., ICMWs) over the tax function makes earnings management through the income tax accrual (Dhaliwal...

This paper investigates whether the level of customer concentration can moderate the effect of the Sarbanes–Oxley Act of 2002 (SOX) on the earnings management of U.S. corporations. Customer concentration can act as a mechanism for reducing agency problems by pressuring supplier firms to be...

The purpose of this study is to examine whether mandated introduction of Public Company Accounting Oversight Board in United States of America improves the audit quality for listed companies. The empirical analysis includes the companies listed in NASDAQ stock exchange that constitutes 6,600...

We investigate the association between earnings management and internal control weaknesses as well as the association between earnings management and firm size. We use two samples: one from large accelerated filers, matched with the same number of firms with strong internal control, and the...

We assess the impact of the Sarbanes-Oxley Act (SOX) on discretionary accruals (DA) and real earnings management (REM) activities around CEO turnovers. Improved corporate governance post-SOX can either deter earnings management (the deterrence effect) or pressure CEOs to inflate earnings when...

We provide evidence that distinguishes between competing production cost-based explanations of how to interpret unusually high (or low) audit fees and their expected relation with accounting quality. Abnormally high or low fees are typically proxied by the residuals obtained from fee models....

The U.S. Congress passage of the Sarbanes-Oxley Act of 2002 (SOX) was a direct response to the accounting scandals of the 1990s and an attempt to reform the financial/business reporting process. Due to corporate malfeasance in the United States since the mid 1990s, there has been a significant...