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on Accounting and Auditing |
| By: | Henrik Nilsson (Stockholm School of Economics); Jenni Kallunki (University of Oulu - Department of Economics, Accounting and Finance); Florian Eugster (University of St. Gallen - Institute of Accounting, Control and Auditing; Swiss Finance Institute); Ann Vanstraelen (Maastricht University) |
| Abstract: | Using a novel dataset of private stock portfolios from Swedish auditors, we provide initial empirical evidence on the extent of Big 4 auditors' ownership of individual stocks, their trading performance, and the quality of their audits. We find that individual stock ownership is widespread among Big 4 auditors, with over 50% holding shares in publicly listed Swedish companies, and that stock ownership varies with personal and professional characteristics. On average, Big 4 auditors generate positive market-adjusted returns on their investments, with some evidence of risk-adjusted outperformance, especially among audit partners and industry experts. However, Big 4 stock-owning auditors tend to issue more aggressive and less conservative audit reports and have a higher propensity for clients to meet or beat the zero earnings threshold. Collectively, our findings suggest that some Big 4 auditors can leverage their professional knowledge for private investment gains and that audit quality among these auditors may be compromised. |
| Keywords: | Auditors, Audit quality, Stock ownership, Investment performance |
| JEL: | M41 M42 G11 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:chf:rpseri:rp2579 |
| By: | David Gstrein; Florian Neumeier; Andreas Peichl; Pascal Zamorski |
| Abstract: | Key MessagesThe corporate tax burden falls mainly on firms and property owners, while workers are less affected than earlier studies suggestCommercial property owners bear a substantial share of the burden as higher taxes reduce property valuesThe lower tax burden on workers suggests that corporate taxation is likely more progressive than often assumedBecause land is immobile, corporate tax distorts economic decisions less than expectedCorporate tax debates should go beyond firms and workers to include property markets, with implications for fairness, efficiency, and local tax policy |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:econpb:_77 |
| By: | Masahiro Enomoto (Research Institute for Economics and Business Administration, Kobe University, JAPAN); Nobuhiro Asano (Graduate School of Business, Osaka Metropolitan University, JAPAN) |
| Abstract: | This study examines the impact of going-concern (GC) information disclosure on firms' investment efficiency, focusing on Japan's revised disclosure system introduced in 2009. The reform establishes a two stage framework that requires disclosure in the Management Discussion and Analysis (MD&A) when events or conditions are identified that raise significant doubt about the GC assumption. If management's plans are expected to mitigate these concerns, disclosure is limited to the MD&A; however, if material uncertainty remains, more extensive disclosure is required in the financial statement footnotes and audit reports. Using a sample of financially distressed Japanese firms from 2010 to 2020, we document evidence of underinvestment among firms that disclose GC information compared to distressed firms that do not disclose such information. Similar results are observed even when GC information is separated into two stages of disclosure. The results remain robust to the use of entropy balancing and propensity score matching. Further analysis indicates that strong relationships with banks and high-quality audits mitigate underinvestment. Overall, our findings demonstrate the real effects of mandated GC information disclosure and highlight the role of institutional mechanisms in shaping investment behavior. |
| Keywords: | Going concern information; Investment efficiency; Real effects; Banks; Auditors |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:kob:dpaper:dp2025-24 |