Opportunistic Avoidance of Litigation Loss Accruals and the Mitigating Effects of Auditors
| العنوان: | Opportunistic Avoidance of Litigation Loss Accruals and the Mitigating Effects of Auditors |
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| المؤلفون: | Hsin-Yi Huang, Eric Lohwasser, Zhiyuan Yu, Hsihui Chang |
| المصدر: | Journal of Accounting, Auditing & Finance. :0148558X2110685 |
| بيانات النشر: | SAGE Publications, 2021. |
| سنة النشر: | 2021 |
| مصطلحات موضوعية: | Accounting, Economics, Econometrics and Finance (miscellaneous), Finance |
| الوصف: | We find that firms with preliminary earnings that are expected to just meet analyst forecasts are more likely to only disclose (i.e., not accrue) litigation loss contingencies, claiming that the litigation event falls below the qualitative thresholds necessitating accrual. We also find that this opportunistic treatment of a subjective estimate is reduced when firms’ auditors have expertise in the defendant’s industry or have experience auditing litigation contingencies. Furthermore, we find that opportunistic disclosure usage increases when firms are more economically important to auditors’ client portfolios. Our results are robust to a series of additional tests. We provide evidence to support the Public Company Accounting Oversight Board’s (PCAOB) call for increased auditor professional skepticism toward management bias and opportunism when evaluating subjective estimates. |
| تدمد: | 2160-4061 0148-558X |
| DOI: | 10.1177/0148558x211068585 |
| URL الوصول: | https://explore.openaire.eu/search/publication?articleId=doi_________::d4816481a1d8ee874ea479100995322f https://doi.org/10.1177/0148558x211068585 |
| Rights: | CLOSED |
| رقم الانضمام: | edsair.doi...........d4816481a1d8ee874ea479100995322f |
| قاعدة البيانات: | OpenAIRE |
| تدمد: | 21604061 0148558X |
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| DOI: | 10.1177/0148558x211068585 |