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Economic consequences of expanding sales tax nexus: Evidence from stock price reactions to the Wayfair decision Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2024-03-04 Thomas R. Kubick, Thomas C. Omer, Courtney E. Yazzie
We analyze investor reactions to the United States Supreme Court decision in (hereafter ), which overturned decades of judicial doctrine related to sales tax nexus. precedent provides a broadening of sales tax nexus and a significant increase in compliance costs. It also levels the playing field by requiring more firms without a physical presence to collect sales tax. We document negative stock market
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Regulatory fragmentation and internal control weaknesses Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2024-02-19 Hongkang Xu
This study examines the relationship between regulatory fragmentation and internal control weaknesses in U.S. firms using a dataset sourced from the Federal Register. The findings reveal a significant negative association between regulatory fragmentation and the likelihood of internal control weaknesses. The study further finds that regulatory fragmentation reduces the number of internal control weaknesses
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Is the mispricing of bank earnings related to financial regulation uncertainty? Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2024-01-26 Tuan Ho, Edward Lee, Gerald J. Lobo, Zhenmei Zhu
We examine the impact of financial regulation uncertainty on the mispricing of earnings in the banking sector. To the extent that the uncertainty generated by the regulatory process can trigger opinion divergence (rational attention), we expect it to delay (accelerate) share price responses to banks’ earnings news. Consistent with the dominance of the opinion divergence effect, we show that such uncertainty
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Intraday disclosure timing deviations and their implications for financial reporting Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2024-01-27 Jennifer Wu Tucker, Angie Wang
The same management team makes multiple reporting and disclosure decisions under similar incentives based on input from the same information system. We examine whether the way in which a firm makes minor disclosure decisions is a telltale sign for outsiders to evaluate seemingly unrelated but more consequential financial reporting decisions. We find that a firm that uses a different intraday window
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CEO turnovers due to poor industry performances: An examination of the boards’ retention criteria Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2024-01-23 Lin Li, Peter Lam, Wilson H.S. Tong, Justin Law
Numerous studies examine CEO turnover but rarely in the context of business cycles. We demonstrate that the role of the set of turnover decision parameters could change according to industry conditions. Specifically, idiosyncratic returns are more conducive to forced CEO turnover probabilities during recessions than during booms, whereas the opposite is true for industry returns. We provide evidence
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Minority shareholders and tax avoidance Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2024-01-20 Antonio De Vito
This paper examines whether and how external country-level corporate governance devices affect corporate tax avoidance. Using a panel of public firms across 33 countries, I show that laws empowering minority shareholders hinder corporate tax avoidance, consistent with shareholder protection laws spilling over to tax avoidance through reduced income diversion. I corroborate the validity of these findings
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Media coverage and debt financing choice Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2024-01-22 C.S. Agnes Cheng, Liangliang Jiang, Wei-Ling Song
Extant literature has established the roles of media coverage in the financial system as an important information source and an integrated part of corporate governance, often through its substitution effects with other mechanisms. However, in this study, we utilize negative news sentiment to demonstrate how media coverage can also complement other governance devices, such as private debt and concentrated
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Managerial overconfidence and classification shifting Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2024-01-04 Heeick Choi, Huiqi Gan, SangHyun Suh
This study examines whether overconfident CEOs engage in classification shifting. We find that managerial overconfidence is related to an increase in unexpected core earnings via reclassifying recurring expenses as special items. This finding is robust to controlling for firms’ propensity to engage in accruals management and real earnings management, using a subsample of non-zero income-decreasing
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How do investors perceive corporate general counsel? The role of monitoring and advising demand Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-12-28 Zhihong Chen, Yun Ke, Ke Wang
We find that firms with a general counsel (GC) in top management (GC firms) have a higher ex-ante cost of equity implied in stock prices and analysts’ earnings forecasts. Lead-lag changes analysis shows that the cost of equity increases after, but not before, the appointment of GCs to top management. Cross-sectional analyses suggest that the cost of equity difference between GC and non-GC firms and
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Local peers and corporate reporting behavior Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-12-22 Jere R. Francis, Nargess M. Golshan, Inder K. Khurana
We find that firms exhibit greater earnings similarity when compared to industry peers in the same city, as the number of local peers increases. This is due to the potential adverse consequences of underperforming relative to local peers. As the number of local peers increases, there is increased local competition, which creates pressure to perform as well as competitors. Firms respond to this pressure
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Net operating losses and Chapter 11 Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-12-20 Velia Gabriella Cenciarelli, Alessandro Gabrielli, Giulio Greco
In this paper, we investigate the association between net operating losses (NOLs) and Chapter 11 filings by firms that decided to restructure their business (“restructuring firms”). Studying a sample of public firms in the US over a 30-year period, we show that after controlling for the expected industry post-reorganization tax rates, higher NOLs are associated with the decision to file under Chapter
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Why do audit clients voluntarily disclose the compliance and planning components of auditor provided tax services? Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-12-16 Ronen Gal-Or, Michelle Harding, Vic Naiker, Divesh Sharma
Criticisms of audit firms marketing and devising tax avoidance strategies for their audit clients have led to calls from regulators, investors, and proxy advisors for more detailed disclosures on the composition of tax non-audit services (NAS). Using a hand-collected dataset, we examine the determinants of audit clients’ voluntary bifurcation of total tax NAS fees into the tax planning and compliance
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Labor skill and accounting conservatism Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-12-09 Jeff Zeyun Chen, Youngki Jang, Boochun Jung, Minyoung Noh
We examine the role of labor market frictions in shaping firms’ accounting policies. We find that firms’ reliance on high-skill labor is negatively related to accounting conservatism, presumably because higher labor adjustment costs make conservative accounting policies more costly. Cross-sectional tests further support the notion that labor adjustment costs are the main driver for the negative relation
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CEO succession and auditor going concern decisions: An analysis of outsider CEOs and generalist skills Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-12-07 Egor Evdokimov, Iliyas Yusoff
This study shows how external CEO succession can mitigate external auditors’ propensity to issue a going concern opinion (GCO) in financially distressed firms, particularly when the outsider CEO possesses higher generalist skills relative to the outgoing CEO. We show that our findings are unlikely to be driven by factors such as pre-succession restructuring, institutional ownership, and board quality
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Does choice matter? The effect of filing method autonomy on taxpayer aggressiveness in a pre-filled tax return system Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-12-04 Jason M. Schwebke
While pre-filled tax filing systems are the norm in many European countries, individuals in the U.S. are accustomed to the autonomy and control associated with preparing their own tax return. Taking that autonomy away by requiring individuals to use a pre-filled system could have negative consequences. Prior research has shown that implementing a pre-filled system in the U.S. may decrease compliance
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The effects of local newspaper closures on nonprofits’ executive compensation Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-12-03 Robert Felix, Joshua A. Khavis, Mikhail Pevzner
We examine the role of local newspapers in monitoring the nonprofit sector by testing how local newspaper closures affect nonprofits’ executive compensation levels. Although prior research establishes that local newspaper closures affect behavior of for-profits and municipalities, the unique governance and enforcement environment of nonprofits make it unclear whether and how closures of local newspapers
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Who participates in corporate income tax consolidation?: Evidence from Japan Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-11-20 Kazuki Onji
When a group of affiliated corporations can file a single tax return based on a combined income, what types of groups would take up the option? This study empirically analyzes decisions to participate in a single-jurisdiction consolidated tax filing. The data consists of 2,782 Japanese corporate groups headed by publicly-traded corporations observed from 2002 to 2007. Results indicate a higher likelihood
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Local happiness and corporate financial misconduct: Does happiness reduce organizational opportunistic behavior? Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-11-01 Feiyang Cheng, Jing Liao, Xutang Liu, Ahmet Sensoy, Shouyu Yao
This study explores the impact of local happiness on corporate financial misconduct. Using large-scale survey data to construct the measurement of the local happiness level, we find that firms headquartered in happier regions are less likely to engage in financial misconduct. Our mechanism analysis indicates that local happiness promotes the building of regional social capital and the cost of misconduct
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Do United States Tax Court judge attributes influence the resolution of corporate tax disputes? Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-10-28 Bradley P. Lindsey, Sophie McDonnell, William J. Moser
Corporate taxpayers can have economically meaningful disputes with the United States Internal Revenue Service (IRS) that ultimately involve the federal judiciary. In an attempt to reduce the number of corporate tax disputes going to trial and reduce the amount of time between when corporate taxpayers file a petition with the United States Tax Court (USTC) and resolution of the case, politicians and
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Tone management and stock price crash risk Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-10-24 Doron Reichmann
Managers have substantial discretion over qualitative disclosures. At the same time, disclosure tone is an important source of information to investors. In this study, I examine the relation between tone management and future stock price crash risk. Consistent with the view that managers use their discretion over disclosure tone for intentional information management, I find that tone management in
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Cannabis financial statement audits in Canada before and after legalization: A “joint” analysis Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-10-16 James D. Brushwood, Michelle A. Draeger, Eric T. Rapley
Cannabis has become a multi-billion-dollar worldwide industry and presents accountants with unique challenges and opportunities. This descriptive study examines characteristics of financial statement audits for this budding industry in Canada, one of the first countries to legalize recreational adult use of cannabis. Consistent with cannabis audit clients having higher risk, we find they incur more
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Due process as a legitimating mechanism: Participation and responsiveness in the development of IFRS 17: Insurance contracts Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-10-13 Miguel Arce, Begoña Giner, Mohammed Amin Taleb
This paper investigates the role of due process in legitimizing the International Accounting Standards Board (IASB) and uses the development of IFRS 17-Insurance Contracts (IASB, 2017a) as a case study. It examines stakeholders’ participation and assesses the IASB’s responsiveness to the views expressed in the comment letters. It focuses on changes in recognition, valuation, and disclosure during the
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Misstatement verifiability and managers’ earnings warning decisions Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-10-13 Jihun Bae, Jaeyoon Yu
We examine whether the verifiability of misstatements in prior forward-looking earnings disclosures contributes to managers’ decisions to issue earnings warnings. Using securities class action lawsuits from 1996 to 2019 pertaining to forward-looking earnings disclosures, we find that earnings warnings are positively associated with the verifiability of misstatements in such disclosures. The results
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To replicate or not to replicate? That is the question Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-10-11 Divesh S. Sharma
The scientific research world was shaken by revelations of a crisis in reproducing well-regarded research in psychology. This crisis reverberated across several academic disciplines including accounting, which led to controversy about the place and status of replications in accounting. The imperative for encouraging replications in our field is not new and has been met largely with opposition. While
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Short-sale constraints and firm investment efficiency: Evidence from a natural experiment Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-10-07 Zhihong Chen, Siwen Fu, Ke Wang
We examine the causal effect of relaxing short-sale constraints on firm investment efficiency using the experiment of the SEC Regulation SHO pilot program. Using a difference-in-differences approach, we find significant treatment effects of the pilot program on mitigating both underinvestment and overinvestment during the pilot period. These treatment effects disappear after the end of the pilot program
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The dark side of auditor pay disparity: Evidence from audit adjustments Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-09-22 Lijing Tong, Lu Xie, Min Zhang
This study examines the relation between auditor pay disparity and audit adjustments, and finds that offices with higher pay disparity are associated with lower magnitudes of audit adjustments. Further analysis suggests that the negative influence on audit adjustment is primarily driven by abnormal pay disparity. These results align with Equity Theory, which posits that pay disparity leads to employees
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Political grammars of justification and cost-benefit analysis in SEC rulemaking Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-09-20 Lisa Baudot, Dana Wallace
We investigate how financial regulators justify rulemaking decisions on socially oriented disclosure rules through evidence-based policymaking (EBPM) mechanisms. To do so, we analyze the Securities and Exchange Commission’s (SEC) justifications within the cost-benefit analysis (CBA) it performs when promulgating the conflict minerals disclosure rule mandated by the U.S. Congress. We use a grammatical
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The impact of TCJA on CEO compensation Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-09-12 LeAnn Luna, Kathleen Schuchard, Danielle Stanley
The 2017 Tax Cuts and Jobs Act (TCJA) expanded the impact of IRC Section 162(m) by disallowing a tax deduction for any compensation over $1 million paid to top executives. Under prior law, qualified performance-based compensation was exempt from the $1 million limit. Using OLS regressions, we examine whether TCJA affected CEO compensation immediately after enactment. We find evidence that CEO salaries
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Editorial Board Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-09-14
Abstract not available
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Executive compensation horizon incentives, performance targets, and auditor risk assessment Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-09-09 Qiyuan (Rachel) Peng, Padmakumar Sivadasan, Rui-Zhong (R.Z.) Zhang
Shorter compensation duration can induce executives to act myopically and manage earnings to boost short-term firm performance. Such earnings management activities increase financial statement misstatement risk and, therefore, audit risk. Using audit fees as a proxy for auditors’ risk assessments, we investigate whether auditors consider executives’ compensation horizon incentives in assessing audit
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Auditor's professional judgment, audit efficiency and interplay between legal liability and regulatory oversight Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-09-07 Francois Larmande, Cédric Lesage
This paper analyzes the impact of two enforcement mechanisms – regulatory oversight (inspection by the Public Accounting Oversight Board – PCAOB) and legal liability – on audit effectiveness and audit efficiency, when auditor's professional judgment is at stake. Professional judgment is a double-edged sword: used wisely, it enables efficient audit performance, but can also be used as an excuse to put
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Firms’ discretion in the option exercise price adjustments during spinoffs Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-09-01 Tao Sun
During corporate spinoffs, executives’ original options are converted to new options whose exercise price is reduced. The tax and financial regulations however do not provide specific guidance regarding the option conversion, giving firms considerable discretion over the extent of reduction in the exercise price. This paper finds evidence that firms indeed use discretion to reduce the new option’s
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A concave relation between equity-based incentives and misreporting Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-08-29 Jae Hwan Ahn, Syed Zulfiqar Ali Shah, Gitae Park
A fraud mechanism, where managers inflate stock prices via misreporting for post-misreporting insider trading, is well captured by the delta of their equity portfolio. But a widely accepted view in the literature is that the impact of delta on misreporting is unclear because delta-related rewards (e.g., gains from insider trading) and risks (e.g., detection of fraud) likely offset each other. In this
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Enforcement and disclosure Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-08-21 Benedikt Franke, Dirk Simons
Absent sufficient enforcement, disclosure regulations are often seen as inconsequential. However, enforcement could have unintended effects on firms' incentives to disclose information voluntarily. We develop a model to analyze the impact of enforcement on firms' mandatory and voluntary disclosure behavior. The model can accommodate different disclosure and enforcement regimes depending on its parameters
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Nonprofit accounting conservatism Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-08-15 Jennifer L.M. Altamuro, Erica E. Harris
In this study we examine whether U.S. nonprofit organizations engage in conservative financial reporting, and whether conservatism has an impact on future donations. Employing the model developed by Ball and Shivakumar (2005) for non-public companies, coupled with a sample of over 72,000 industry diverse nonprofit-years, we find evidence consistent with nonprofit firms, on average, reporting conservatively
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Using relevant headings in risk factor disclosures: What is the impact on information processing? Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-08-08 Feiqi Huang, Tawei Wang, Ju-Chun Yen
This paper empirically examines whether using relevant headings to categorize risk factors in Item 1A of Form 10-K can enhance its readability and thus facilitate investors’ understanding. Using a sample of S&P 1500 firms from 2017 to 2019, we find that post-filing abnormal returns and abnormal bid–ask spreads are lower for firms that use headings in Item 1A than for those that do not. We also find
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Editorial Board Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-08-04
Abstract not available
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Stakeholder conflict and standard-setting foundation oversight Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-08-01 Amanda M. Convery, Matt Kaufman, Terry D. Warfield
This study examines foundation oversight authority as a distinct tool used to maintain the accounting profession’s delegated authority to set standards. Prior literature traditionally focuses on the standard-setting boards and technical arguments surrounding proposed accounting standards. We examine whether the Financial Accounting Foundation (FAF) can manage stakeholder conflict and legitimize contentious
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The JOBS Act and IPO issuance rate Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-07-26 Mengyao Cheng
This study extends prior studies by examining both issued and publicly withdrawn IPOs to assess the effect of the Jumpstart Our Business Startups Act (JOBS Act) of 2012. Results indicate that the JOBS Act increases IPO issuance rate during the public filing stage, and confidential filings, “Testing-the-Waters”, and reduced disclosures provisions all contribute to this effect. The JOBS Act weakens the
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Reputation and commercialism: Did accounting have a golden age? The US audit profession 1929–1990 Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-07-24 Michael E. Doron
This paper argues that maintaining the CPA’s reputation, along with a collegial professional environment, were the central goals of the American audit profession through most of the twentieth century. Matthews (2017) and Lee (1995) contend that economic self-interest has always been the profession’s goal. This paper, based on extensive study of primary sources largely unused by accounting historians
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Insider trading, future earnings, and post-earnings announcement drift Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-07-21 Lyungmae Choi, Lucile Faurel, Stephen A. Hillegeist
This paper examines the association between insider trading prior to quarterly earnings announcements and the magnitude of the post-earnings announcement drift (PEAD). We conjecture and find that insider trades reflect insiders’ private information about the persistence of earnings news. Thus, insider trades can help investors better understand and incorporate the time-series properties of quarterly
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The effect of disclosure committees on non-GAAP reporting quality Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-07-18 Jie Hao
I examine whether company-implemented disclosure committees help to improve non-GAAP reporting quality. I find that firms with disclosure committees provide higher quality non-GAAP performance metrics and that the exclusions used to calculate their non-GAAP numbers are less persistent for future operating income and operating cash flows. Moreover, I find that firms with disclosure committees are less
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Earnings expectations and the quality of financial services Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-07-13 Xiaomeng Shi, Duc Duy Nguyen, Mingzhu Wang
Using complaint data filed by consumers with the Consumer Financial Protection Bureau against financial institutions, we show that banks receive, on average, 13.3% more customer complaints in the quarter immediately after they narrowly beat analysts’ earnings forecasts. The effect is mainly driven by banks’ attempts to reduce their non-interest expenses to beat earnings benchmarks. The relationship
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Does reporting quality affect systematic risk? Evidence from a regulatory lottery Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-07-07 Linus Siming
On June 1, 1976, the Swedish parliament voted on a legislative bill that, if approved, would have substantially increased the quality of the corporate information disclosed to the public. Since parliament was hung, the outcome of the vote was decided by a lottery. The winning lottery ticket was a “No”, which meant that the bill was rejected. I exploit this lottery as an exogenous event to study if
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Do corporate taxes affect employee welfare? Evidence from workplace safety Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-07-06 Daniel Bradley, Connie X. Mao, Chi Zhang
We examine the impact of tax policy on worker safety that exploits spatial discontinuity in treatment and control establishments stemming from state-level corporate tax changes. The granularity of our data and econometric approach allows us to exploit within-firm, across-establishment variation in worker safety shedding light on the real effects of headquarter versus plant-level decisions. Plant-level
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Nigerian professional investors' sense-making of the impact of shareholder activism on corporate accountability Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-07-05 Folajimi Ashiru, Emmanuel Adegbite, Franklin Nakpodia
This study investigates the perceptions of professional investors (PIs) on the impact of three groups of shareholder activists (i.e., reputable, sophisticated, or institutional) on corporate accountability in a weak institutional context and how this shapes the PIs’ investment recommendations. Relying on a sense-making theoretical perspective of the power and competence of shareholder activists obtained
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Transparency trade-offs in the operation of national Public Private Partnership units: The case of Ireland’s National Development Finance Agency Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-06-30 Gail Sheppard, Matthias Beck
Since 2002, the Irish National Development Finance Agency [NDFA] has played a leading role in the procurement of Public Private Partnership [PPP] projects in Ireland (UNECE, 2008). It has procured 9 PPP projects bundles, which are currently listed on its website, between 2002 and 2022 1 in addition to Primary Care, Justice, OPW and Education bundles not currently listed on its website. Ireland follows
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Evidence from the adoption of IFRS 9 and the impact of COVID-19 on lending and regulatory capital on Spanish Banks Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-06-27 Germán López-Espinosa, Fernando Penalva
This paper provides early descriptive evidence on the effect of the adoption of IFRS 9 and COVID-19 on banks’ lending and regulatory capital. Using a sample of Spanish quoted banks, we find that the implementation of IFRS 9 resulted in an increase in the timeliness of loan loss recognition, and it only had a negative effect on lending for small banks that are timelier in recognizing expected credit
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Editorial Board Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-06-14
Abstract not available
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Firm-level political risk and earnings opacity Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-06-12 Huy Viet Hoang, Khanh Hoang, Cuong Nguyen, Dung Viet Tran
Given the recent growing global uncertainties, firms have encountered increasing political risks and responded accordingly to avoid a negative impact on their performance. This study examines the impact of firm-level political risk on corporate earnings opacity among listed U.S. firms. Our empirical results reveal that higher firm-level political risk engenders greater corporate earnings opacity via
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Support for pension reforms: What is the role of financial literacy and pension knowledge? Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-05-17 Noemi Oggero, Francesco Figari, Elsa Fornero, Mariacristina Rossi
Despite the relevance of the issue of pension system sustainability in most advanced economies, the factors associated with the opposition to pension reforms are still under-studied. In this paper, we investigate the correlation between financial, pension and institutional knowledge and support for pension reforms. Using an ad hoc module of the SHARE data for Italy, we find that financially literate
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Do mandatory risk factor disclosures reduce stock price crash risk? Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-05-12 Shiu-Yik Au, Bin Qiu, Szu-Yin Wu
We test whether voluntary or mandatory risk factor disclosures (RFDs) in 10-K filings is associated with a reduction in stock price crash risk. We find that the level of mandatory RFDs in 10-K filings is associated with a reduction in stock price crash risk but find no similar relationship for voluntary RFDs. We exploit two exogenous shocks to mitigate endogeneity concerns that remain to be addressed
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Editorial Board Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-05-09
Abstract not available
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An evaluation of root cause analysis use by internal auditors Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-04-29 F. Todd DeZoort, Troy J. Pollard
The objective of this study is to increase understanding of internal auditor use of root cause analysis (RCA). The IIA’s Practice Advisory 2320–2: Root Cause Analysis (IIA 2011) states that RCA should be a core competency for internal auditors to provide insight and add value within organizations. However, little is known about internal auditor use of RCA in a profession where normative problem-solving
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The impact of financial reporting flexibility on auditor risk judgement: Evidence from the implementation of FIN 46R Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-04-28 Chen Chen, Winnie S.C. Leung, Xuedan Tao, Huabing Wang
This paper investigates how auditors respond, in terms of their pricing and audit work, to a reduction of clients’ financial reporting discretion upon the implementation of FIN 46R, which requires firms to consolidate the variable interest entities (VIE) under their control. Using a difference-in-differences research design, we find that auditors charge relatively fewer audit fees and have shorter
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Vol. 42, #2, Bios. Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-04-27
Abstract not available
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The SEC revolving door and comment letters Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-04-26 Michael Shen, Samuel T. Tan
Government officials, advocacy groups, and the business press have raised concerns that former SEC employees may continue to influence the SEC after leaving the agency. Using hand-collected data on the characteristics of 1,384 lawyers who represented firms in responding to SEC comment letters between 2005 and 2016, we examine the impact of post-revolving SEC employees on the SEC comment letter process
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Chief Human Resource Officers and accounting disclosures: Illuminating the firm’s most important asset or window dressing? Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-04-18 Andrie Michaelides, Nikos Vafeas
Social activism, including movements towards equal pay, gender rights, and racial equality, has heightened public scrutiny, exerting pressure on firms to reassess and reform their human resource practices to ensure they align with current social and ethical norms. Chief Human Resource Officers (CHROs) have a potentially important role in defining and promoting appropriate human resource practices through
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Editorial for the special issue on accounting and personal finance in the Journal of Accounting and Public Policy Journal of Accounting and Public Policy (IF 3.629) Pub Date : 2023-04-10 Kathleen Weiss Hanley
Abstract not available