We propose that firms use stock splits as a means of attracting attention and inducing information production to correct price distortion caused by investors’ 52-week high anchoring bias. Our analysis shows that firms are more likely to split stocks when their prices are near 52-week highs, especially if they are highly profitable and undervalued. After splits, undervaluation gradually disappears. Moreover, these splits are associated with a slower market reaction and a more positive post-split drift, consistent with the notion that investors’ anchoring bias hinders price adjustment, leading to a gradual price correction. In addition, the likelihood of such splits increases with CEO wealth-performance sensitivity, and investment-price sensitivity increases following splits. Our evidence suggests that firms utilize stock splits to correct mispricing induced by investors’ 52-week high anchoring bias.

Foreign workers have been an important part of the labor force in public accounting firms over the past two decades. In this paper, we investigate whether and why foreign workers influence audit quality. We find that audit offices with more newly hired foreign labor have a lower mean absolute value of discretionary accruals and a smaller rate of restatements for their clients. The effect is more pronounced for audit offices that face more resource constraints or require greater foreign expertise. The results of improved audit quality are robust to alternative measures of immigrant intensity and audit quality, alternative samples, and using different ways to address endogeneity concerns. Overall, our paper contributes to the literature by showing the impact of foreign labor in the auditing profession and provides public policy implications for the recent H‐1B visa debate.