... generalizations. First, the adverse effect of financial misstatements documented by Beatty et al. (2013) is not limited to high-profile scandals and can be generalized to a larger population. Second, the distortions are not confined to capital investments; they also extend to choices peer firms make...

...Keith Czerney; Jaime J. Schmidt; Anne M. Thompson ABSTRACT According to auditing standards, explanatory language added at the auditor's discretion to unqualified audit reports should not indicate increased financial misstatement risk. However, an auditor is unlikely to add language that would...