Learn More
This is a PDF file of a manuscript that has been accepted for publication in an American Accounting Association journal. It is the final version that was uploaded and approved by the author(s). While the paper has been through the usual rigorous peer review process for AAA journals, it has not been copyedited, nor have the graphics and tables been modified(More)
We view audit-quality choice as one among many that managers make to maximize firm value. We question whether audit-quality differences among publicly traded companies are of significant interest to investors, clients, and auditors and ask for research on this topic. Relatedly, we ask for research on whether auditors and their clients show behavior(More)
Relative Performance Evaluation (RPE) theory predicts that firms filter out common shocks (i.e., those affecting the firm and its peers) while evaluating CEO performance, and that the extent of filtering increases with the number of firms in the peer group. Despite the intuitive appeal of the theory, previous tests of RPE find weak and inconsistent(More)
We examine how fair value accounting affects debt contract design, specifically the use and definition of financial covenants in private loan contracts. Using SFAS 159 adoption as our setting, we find that 14.5% of loan contracts modify covenant definitions to exclude the effects of SFAS 159 fair values. Only a limited number of these modifications exclude(More)