Abstract Accounting comparability among peer firms in the same industry reflects similarity and relatedness of firms’ operating environments financial reporting. From perspectives “inherent audit risk” “external information efficiency,” is helpful for auditors assessing client risk lowers costs acquisition, processing, testing. I posit that availability about comparable clients helps improve efficiency accuracy. Empirical results show negatively related to effort (surrogated by fees delay)....

SYNOPSIS Using Chinese data of key audit matters (KAM) reports, this study assesses whether the KAM rule improves quality and how disclosures relate to quality. With textual analysis, we evaluate disclosure characteristics in detail find that auditors report both industry-generic firm-specific KAM. The wordings, a large extent, are differ reporting components. Our empirical investigation via pre-post difference-in-differences analyses reveals is improved following mandatory rule....

Purpose Environmental, social and governance (ESG) factors have become increasingly important in investment decisions, leading to a surge ESG investing the rise of sustainable assets. Nevertheless, challenges disclosure, such as quantifying unstructured data, lack guidelines comparability, rampantly exist. rating agencies play crucial role assessing corporate performance, but concerns over their credibility reliability persist. To address these issues, researchers are utilizing machine...

Purpose – The paper aims to examine whether or not firms voluntarily filing in XBRL (eXtensible Business Reporting Language) format enjoy a lower cost of capital. XBRL, “interactive data” as the US Securities and Exchange Commission refers it, is an information that enables electronic exchange standardized business financial information. Design/methodology/approach authors investigate voluntary adoption impacts equity capital using sample participated SEC Voluntary Filer Program, each...

ABSTRACT This study examines the role of information transparency in facilitating peer firms' investment follow‐on innovation. We capture with both textual and numerical disclosed 10‐Ks. Using patent citations to proxy for innovation, we predict find a positive association between at knowledge source further show that effect varies degree uncertainty around technological Thus, evidence suggests facilitates innovation by resolving associated An analysis using cited going‐private decision as...

ABSTRACT Prior research has argued that companies in transition economies engage corporate social responsibility (CSR) activities to achieve political goals, such as building connections with the government. However, it is unclear why chief executive officers (CEOs) agree make these politically driven CSR decisions mainly benefit controlling shareholders. We show shareholders may “bribe” CEOs greater compensation or perks—a form of economic rents extracted by CEOs—to decisions, and a pattern...

Purpose SOX Section 404 requires that public companies evaluate and have their auditors attest to the effectiveness of internal control over financial reporting (ICFR). These compare ICFR Internal Control Frameworks issued by Committee Sponsoring Organizations Treadway Commission (COSO). This paper aims examine whether implementation 2013 Framework has a positive impact on information environment U.S. companies. Design/methodology/approach The study sample comprises firms from S&P 1500...

Purpose The purpose of this study is to analyze comment letters on Docket 034, which proposes reforms audit reports, shed light the actions various stakeholder groups in Public Company Accounting Oversight Board (PCAOB)’s standard-setting process. identifies groups, examines timing their involvement, and evaluates arguments lobbying efforts influence regulatory outcomes. Design/methodology/approach This paper stakeholders’ behaviors submitting during PCAOB’s public consultation period for...

SYNOPSIS We examine how well machine learning algorithms can leverage historical pricing data to reduce the initial bargaining gap between sellers and buyers, aiming improve personalized price effectiveness for traditional offline firms. In collaboration with a Chinese wholesaler, we construct model apply it real transactions. show that under model’s prices, acceptance rate of among buyers increases by 9.91 percent, adjustment frequency decreases 23.52 compared prices set salespeople....

ABSTRACT In this study, we examine whether auditor style is related to financial reporting similarity. Based on the count of accounting items disclosed in eXtensible Business Reporting Language (XBRL) 10-K filings, define similarity terms number similar line reported by a pair firms and develop measure pairwise Consistent with literature (e.g., Francis, Pinnuck, Watanabe 2014), show that share same have more similarities their statements. We find robust results using alternative metrics...

ABSTRACT Advances in information technology (IT) have changed the way that companies conduct business, prepare their financial statements, and statements audited. On one hand, IT decreases audit risk by improving operation internal control effectiveness, which may decrease inherent risk. other complexity of introduces unconventional risks for auditors, especially creating challenges auditors when auditing effectiveness controls detecting accounting irregularities. Thus, relationship between...

SYNOPSIS Against the backdrop of Chinese Directive 40 (China's Reg FD) issued in 2007 as an attempt to curb insider trading and level information playing field, this study investigates whether analysts' private acquisition influences extent which firm-specific is impounded into stock prices, i.e., price synchronicity, how restrictions on selective disclosures imposed by have shaped relationship between analyst synchronicity. Using a pre-Directive sample, we show that synchronicity negatively...

Purpose The purpose of this study is to examine the impact goodwill impairment losses on bond credit ratings. Design/methodology/approach authors use regression analysis relationship between and Findings empirical results show a negative amount ratings, suggesting that firms with receive lower perform various additional tests, including subsamples in good or bad market time, changes analysis, first time vs subsequent two-stage least squares address potential endogeneity issues. main persist....

ABSTRACT Information technology (IT) can be harnessed to improve the efficiency of production financial reports and audits these reports. Using firm-level IT data U.S. companies, we show that intensity, measured as assets scaled by total assets, is negatively related both earnings report lag audit lag. Further, find this negative relation stronger for firms in industries are likely have an automate or informate strategic role IT. We do not any evidence suggesting intensity reduces gap...

Abstract Recent microstructure research finds that liquidity risk, in particular its information component, plays an important role explaining the post‐earnings‐announcement drift ( PEAD ). We decompose risk into accounting‐associated component and a nonaccounting‐associated examine their relative importance . Our is motivated by recent findings systematic earnings quality negatively associated with risk. find more strongly related to returns than counterpart. Further analyses reveal...

SUMMARY We investigate the chief audit executive's (CAE) internal supervisory role by examining change in monitoring effectiveness following turnover of CAEs. Using a sample firms listed on small and medium enterprise board China's stock exchange, we find that CAE is accompanied reduction financial reporting/internal control quality more pronounced for whose successor CAEs have lower expertise than their predecessors. Further analysis shows negative association with stronger when personal...

ABSTRACT In this paper, we conduct a review of the literature on under-representation women as audit partners and committee chairs, assess quality when they hold these roles. By using U.S. sample from 2016 to 2019, our analyses show that firms with female and/or chairwomen are more likely have lower discretionary accruals, implement effective internal controls, less misstate financial reports than all male pairs. Our paper serves resource for those seeking understand gender differences use...