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Environmental, Social, and Governance (ESG) topics, including employee welfare, have gained the attention of investors and media relations experts alike. Larry Fauver and his co-authors examine the valuation impact of having an employee-friendly (EF) culture using data from 43 countries.Read More
Regulators and investors alike have expressed concern over the growing size of accounting firms’ consulting and advisory practices, fearing that it will lead to diminished focus on audit quality from firm leaders. Linda Myers and her colleagues examine the association between accounting firm consulting revenues and audit quality of public company clients, both before and after the Sarbanes-Oxley Act.Read More
The United States’ regulator for audits of public companies, the PCAOB, recently enacted a new standard that will require auditors to expand their audit reports to disclose “critical audit matters” for their public company clients. This new ruling was met with contention: on the one hand, investors wanted more information from auditors than just a basic “pass” or “fail” opinion; on the other hand, auditors are reluctant to release information that management has not already disclosed in the financial statements. Joseph Carcello, Terry Neal, and their coauthors examine the effect of a similar rule change in the United Kingdom to provide evidence on the potential impact of these expanded audit reports.Read More
The JOBS Act enacted several new laws to increase opportunities for investment. Equity-based crowdfunding provides the opportunity to invest in an early-stage, private company in exchange for equity, with the risk that these are exempt from federal registration (and hence, exempt from certain regulatory oversight). Joan Heminway makes observations about federal securities law transfer restrictions imposed on these types of shares and offers some suggestions for important areas that legislation can address.Read More
James Chyz established a correlation between CEO turnover and whether firms pay more, or less, taxes than their peers.