Selected Publications
The Spillover Effect of SEC Comment Letters on Qualitative Corporate Disclosure: Evidence from the Risk Factor Disclosure
We focus on the indirect effect of SEC comment letters by analyzing how companies change their risk factor disclosures after other leaders and peers in the industry receive a comment letter, even though the original company did not receive a letter itself. Not only does this spillover effect influence how much companies change their disclosures, but it also increases the amount of company-specific information they disclose. We confirm that these actions by the company (that did not receive a letter) improve its disclosures such that they are less likely to receive a future comment letter.
Contemporary Accounting Research, 2018.
Auditor-Client Compatibility and Audit Firm Selection
We examine the likelihood of a client switching auditors when that client does not fit well with other clients of the same auditor. The most dissimilar clients are around 10% more likely to switch auditors, and will tend to change to an auditor with which they are more compatible. Following an auditor change, there is a quick alignment in the footnotes of that client with existing clients of the new auditor, followed by slower changes in unaudited (but reviewed) sections of the 10-K. There is mixed evidence as to whether a better client-firm alignment improves audit quality.
Journal of Accounting Research, 2016.
Large-sample Evidence on Firms' Year-over-year MD&A Modifications
We measure year-over-year changes in companies’ 10-K MD&A disclosures, confirming these changes are more likely to appear following larger operational changes, but finding a decline in the magnitude of these changes and the stock market’s reaction to them. This latter result may indicate a decline in the usefulness of the MD&A for investors, coincident with the MD&A disclosures becoming longer and more boilerplate over time. We find no evidence that sell-side analysts use the MD&A in adjusting their forecasts, possibly due to having superior information sources.
Journal of Accounting Research, 2011.