This paper examines whether and how individual auditors are disciplined for audit errors. Taking advantage of the long history of auditor identity data from China, we find that signing auditors with client restatements are likely to lose the privilege of signing the audit reports of public clients. However, auditors can avoid this consequence by issuing a modified audit opinion to warn of the potential misstatement. We show that auditors are more likely to be disciplined when their firms operate in less concentrated audit markets. Finally, we find positive outcomes from the disciplinary action of the audit firms. Firms that discipline their auditors for restatements have a larger decrease in the rate of client restatements and a larger increase in market share, compared to nondisciplining firms. Their clients have a higher earnings response coefficient after the disciplinary action. In summary, our results suggest that individual auditors in China can face career setbacks when they produce poor quality audits.

We introduce a novel measure of CEO depression by applying machine learning models that analyze vocal acoustic features from CEOs' conference call recordings. Our research was preregistered via the Journal of Accounting Research 's registration‐based editorial process. In this study, we validate this measure and examine associated factors. We find that greater firm risk is positively associated with CEO depression, whereas higher job demands are negatively associated with CEO depression. Female and older CEOs show a lower likelihood of depression. Using this novel measure, we then explore the relationship between CEO depression and career outcomes. Although we do not find any evidence that CEO depression is associated with CEO turnover, we find some evidence that turnover‐performance sensitivity is higher among depressed CEOs. We also find limited evidence of higher compensation and higher pay‐performance sensitivity for depressed CEOs. This study provides new insights into the relationship between CEO mental health and career outcomes.

We investigate the impact of observing peers’ information acquisition on financial analysts’ allocation of attention. Using the timely disclosure mandate by the Shenzhen Stock Exchange as a setting, we find that, shortly after analysts observe that a firm has been visited by peer analysts, they reduce short‐term attention to that firm, as indicated by a reduced tendency to conduct follow‐up visits. Nonvisiting analysts who do not conduct follow‐up visits are more likely to discontinue coverage of the visited firm. These findings are consistent with the conjecture that the timely disclosure reveals the first‐mover advantage of visiting analysts, leading nonvisiting ones to reallocate their limited attention. We also find that, compared with the pre‐mandate period, the information environments of visited firms deteriorate immediately after an analyst's visit but not over the longer term. Further evidence suggests that the timely disclosure mandate has positive externalities in the form of increased immediate attention to and improved short‐term information environments of unvisited peer firms.

We explore whether municipalities with public sector unions exploit aspects of governmental (or “fund”) accounting to obscure the availability of discretionary resources in fund balance accounts, relative to municipalities without public sector unions. We first investigate whether governments with unions report higher proportions of discretionary resources outside of the general fund, a primary measure of financial health, and instead within less prominent fund types. Second, we explore whether governments with unions report lower ratios within accessible general fund balance account categories – that is, report lower proportions of unreserved fund balance. Primary findings are consistent with both hypotheses. Although somewhat mixed, cross‐sectional analyses reveal that effects are magnified when unions have more bargaining power, as proxied by the ability to strike or the absence of state right‐to‐work laws. Further analysis corroborates cross‐sectional findings by examining difference‐in‐differences specifications surrounding the quasi‐exogenous shock of Wisconsin's 2011 weakening of state public sector union laws and Ohio's time‐varying union contract negotiations. Overall, the evidence suggests that governments with unions shelter resources to avoid the appearance of large discretionary amounts available.

We study the use of generative AI for firm‐specific financial analysis on the Seeking Alpha platform. After the initial launch of ChatGPT in November 2022, the share of AI‐generated articles rose sharply to 13.5% of all articles, then declined in late 2023 after Seeking Alpha equated the use of AI to plagiarism and announced a prohibition on its use. We organize our study around two questions: (1) Does AI use increase author productivity? and (2) does AI use have capital market consequences and ultimately affect the informational landscape? We find that authors who adopt AI become more productive, publishing more articles and covering more new firms than non‐adopters. Findings on AI article informativeness are more nuanced. On average, AI articles are less informative than human‐written articles, eliciting smaller trading volume and abnormal return responses. However, AI use leads to increased firm coverage and in turn to improved liquidity and faster price discovery. Our findings suggest that, while AI‐generated articles are currently perceived as less informative than human‐written articles, their comparatively low cost enables increased firm coverage and thereby improves the overall informational landscape.