Preeti Choudhary

Interests

Research

Capital markets, financial reporting, auditing, governance, materiality

Teaching

Financial Accounting

Courses

Scholarly Contributions

Journals/Publications

• Choudhary, P., Rajgopal, S., & Venkatachalam, M. (2009). Accelerated Vesting of Employee Stock Options in Anticipation of FAS 123-R. Journal of Accounting Research, 47((1)), 105-146.
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  Abstract: In December 2004, the Financial Accounting Standards Board (FASB) mandated the use of a fair value-based measurement attribute to value employee stock options (ESOs) via FAS 123-R. In anticipation of FAS 123-R, between March 2004 and November 2005, several firms accelerated the vesting of ESOs to avoid recognizing existing unvested ESO grants at fair value in future financial statements. We find that the likelihood of accelerated vesting is higher if (i) acceleration has a greater effect on future ESO compensation expense, especially related to underwater (out of the money) options; and (ii) firms suffer greater agency problems, proxied by fewer block-holders, lower pension fund ownership and top five officers holding a greater share of ESOs. We also find a negative stock price reaction around the announcement of the acceleration decision, especially for firms with greater agency problems. Furthermore, stock returns are significantly negative before the new vesting dates and positive afterward, suggesting that vesting dates could have been backdated.

Presentations

• Choudhary, P. (2021). The Impact of National Office Governance on Audit Quality. Hong Kong UniversityHong Kong University.
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  ABSTRACT: We investigate whether national office governance is associated with audit quality provided by local audit offices. We proxy for national office governance using two measures of geographical proximity, distance and frequent, direct airline routes between a practice office and the national office of the firm, where the latter introduces exogenous variation. We predict and find closer proximity strengthens national office governance through more monitoring and knowledge transfer, resulting in better audit quality, captured by lower propensity of restatements. Cross-sectional analyses confirm that the relation varies with national office’s sensitivity to costs. Finally, we find that smaller audit firms benefit less from national office governance, consistent with theory that suggests smaller partnership structures have less moral hazard costs and less knowledge transfer benefits from national office governance. Collectively, our results help to explain one avenue that develops audit quality within audit firms.
• Choudhary, P., & Chen, J. (2021). The Impact of National Office Governance on Audit Quality. AAA audit midyearAmerican Accounting Association.
• Choudhary, P., & Chen, j. (2021). The Impact of National Office Governance on Audit Quality. FARS Midyear.
• Choudhary, P. (2020, Feb 2020). Audit Committee Oversight and Financial reporting reliability: Are audit committees overloaded. University of Missouri. University of Missouri.
• Choudhary, P. (2020, Jan 2020). Audit Committee Oversight and Financial reporting reliability: Are audit committees overloaded. Hawaii Annual Research Conference. University of Hawaii Manoa: University of Hawaii Manoa.
• Choudhary, P. (2020, October 2020). The Impact of National Office Governance on Audit Quality. PCAOB/TAR Conference on Auditing and Capital Markets. Virtual: Public Company Accounting Oversight Board.
• Choudhary, P. (2019, January). The Last Chance to Improve Financial Reporting Quality: Evidence from Recorded and Waived Audit Adjustments. Financial Accounting and Reporting Section Meeting. Seattle, WA: American Accounting Association.
• Choudhary, P. (2019, July). Direct Measures of Auditors’ Quantitative Materiality Judgments: Properties, Determinants and Consequences for Audit Characteristics and Financial Reporting Reliability. Presentation at the Public Company Accounting Oversight Board. Washington DC: PCAOB.
• Choudhary, P. (2019, June). The Economics of Audit Production: What Matters for Audit Quality. ISAR. Boson, MA: ISAR.
• Choudhary, P. (2019, March). The Economics of Audit Production: What Matters for Audit Quality. Workshop at American University.
• Choudhary, P. (2019, November). The Last Chance to Improve Financial Reporting Quality: Evidence from Recorded and Waived Audit Adjustments. workshop at Emory University. Atlanta, GA: Emory University.
• Choudhary, P. (2018, APril). Do Auditors Correctly Identify and Assess Internal Control Deficiencies? Evidence from the PCAOB Data. 20th Anniversary McGlaughlin Prize for Research in Accounting Ethics. Oklahoma: University of Oklahoma.
• Choudhary, P. (2018, December). “Why Audit Input Matters? An Analysis of the Determinants of Audit Quality, Profitability, and Audit Fees Using PCAOB Data”. International Institute on Audit Regulation. Washington DC: Public COmpany Accounting OVersight Board.
• Choudhary, P. (2018, Feb). The Last Chance to Improve Financial Reporting Reliability: Evidence from Recorded and Waived Audit Adjustments. PCAOB Annual Inspector Training. Washington DC: Public Company Accounting OVersight Board.
• Choudhary, P. (2018, June). Who is responsible for ensuring a high-quality audit that achieves accurate financial reporting?. The 3rd International Foundation for Accounting Research Conference. Netherlands: Foundation for Accounting Research.
• Choudhary, P. (2018, May). “The Last Chance to Improve Financial Reporting Quality: Evidence from Recorded and Waived Audit Adjustments”. Deloitte Kansas Audit Symposium. Kansas: University of Kanses.
• Choudhary, P. (2018, October). “The Last Chance to Improve Financial Reporting Quality: Evidence from Recorded and Waived Audit Adjustments”. PCAOB/JAR Conference 2018. Washington DC: Public Company Accounting Oversight Board and Journal of Accounting Research.
• Choudhary, P., Ashraf, M., & Jaggi, J. (2018, October). Do Greater Audit Committee Responsibilities Enhance Corporate Governance?”. Pre Duke Fall CampDuke University.
• Choudhary, P., Aobdia, D., & Sadka, G. `. (2017, December). Do Auditors Correctly Identify and Assess Internal Control Deficiencies? Evidence from the PCAOB Data. Invited Presentation. University of Florida: University of Floriday.
• Choudhary, P., Merkley, K., & Schipper, K. (2017, June). Direct Measures of Auditors’ Quantitative Materiality Judgments: Properties, Determinants and Consequences for Audit Characteristics and Financial Reporting Reliability. Invited presentation. George Mason University: George Mason University.
• Choudhary, P., Merkley, K., & Schipper, K. (2017, November). Direct Measures of Auditors’ Quantitative Materiality Judgments: Properties, Determinants and Consequences for Audit Characteristics and Financial Reporting Reliability. Invited Presentation. Stanford University: Stanford University.
• Choudhary, P., Merkley, K., & Schipper, K. (2017, September). Direct Measures of Auditors’ Quantitative Materiality Judgments: Properties, Determinants and Consequences for Audit Characteristics and Financial Reporting Reliability. Invited Presentation. University of Wisconsin: University of Wisconsin.
• Choudhary, P. (2016, September 2016). Qualitative Characteristics of Financial Reporting Errors Deemed Immaterial by Managers?. PCAOB.
• Choudhary, P. (2016, September). Do Auditors Correctly Identify and Assess Internal Control Deficiencies? Evidence from the PCAOB Data. PCAOB.
• Choudhary, P. (2016, September). Do Auditors Correctly Identify and Assess Internal Control Deficiencies? Evidence from the PCAOB Data. PCAOB/JAR Conference.
• Choudhary, P. (2016, September). Qualitative Characteristics of Financial Reporting Errors Deemed Immaterial by Managers?. University of Arizona.
• Choudhary, P. (2016, September). Qualitative Characteristics of Financial Reporting Errors Deemed Immaterial by Managers?. University of Connecticut.
• Choudhary, P. (2015, September). Do Auditor-Provided Tax Services Generate Knowledge Spillover?. American Accounting Association Annual Meeting.
• Choudhary, P. (2015, September). Securities Law Expertise and Corporate Disclosure. Conference on Empirical Legal Studies.
• Choudhary, P. (2015, September). Securities Law Expertise and Corporate Disclosure. University of Minnesota.
• Choudhary, P. (2015, September). Securities Law Expertise and Corporate Disclosure. University of Pittsburgh.
• Choudhary, P. (2015, September). Securities Law Expertise and Corporate Disclosure. Virginia Area Research Conference.
• Choudhary, P. (2014, September). Do Auditor-Provided Tax Services Generate Knowledge Spillover?. JAR/PCAOB Conference.
• Choudhary, P. (2011, September). Do Corporate Attorneys Influence Financial Disclosure?. Ohio State University.
• Choudhary, P. (2011, September). Does Filing Form 10-K Early Matter?. FEA Conference.
• Choudhary, P. (2011, September). Does Filing Form 10-K Early Matter?. New York University.
• Choudhary, P. (2011, September). Recognition versus Disclosure: Evidence that Market Participants Access Items Similarly when Reliability is not an Issue. Penn State Univeristy.
• Choudhary, P. (2011, September). Recognition versus Disclosure: Evidence that Market Participants Assess Items Similarly when Reliability is not an Issue. American Accounting Association Annual Meeting.
• Choudhary, P. (2010, September). Does Filing Form 10-K Early Matter?. Financial Accounting and Reporting Section (FARS).
• Choudhary, P. (2010, September). Recognition versus Disclosure: Evidence that Market Participants Assess Items Similarly when Reliability is not an Issue. American University.
• Choudhary, P. (2009, September). Does Filing Form 10-K Early Matter?. DC Area Schools Symposium.
• Choudhary, P. (2009, September). Does Filing Form 10-K Early Matter?. Securities and Exchange Commission (OEA).
• Choudhary, P. (2009, September). Does Filing Form 10-K Early Matter?. University of Miami.
• Choudhary, P. (2009, September). Evidence on differences between Recognition and Disclosure: A Comparison of Inputs to Estimate Fair Values of Employee Stock Options. Financial Accounting and Reporting Section.
• Choudhary, P. (2008, September). Evidence on differences between Recognition and Disclosure: A Comparison of Inputs to Estimate Fair Values of Employee Stock Options. Columbia University.
• Choudhary, P. (2008, September). Evidence on differences between Recognition and Disclosure: A Comparison of Inputs to Estimate Fair Values of Employee Stock Options. Emory.
• Choudhary, P. (2008, September). Evidence on differences between Recognition and Disclosure: A Comparison of Inputs to Estimate Fair Values of Employee Stock Options. George Mason University.
• Choudhary, P. (2008, September). Evidence on differences between Recognition and Disclosure: A Comparison of Inputs to Estimate Fair Values of Employee Stock Options. George Washington University.
• Choudhary, P. (2008, September). Evidence on differences between Recognition and Disclosure: A Comparison of Inputs to Estimate Fair Values of Employee Stock Options. Georgetown University.
• Choudhary, P. (2008, September). Evidence on differences between Recognition and Disclosure: A Comparison of Inputs to Estimate Fair Values of Employee Stock Options. Massachusetts Institute of Technology.
• Choudhary, P. (2008, September). Evidence on differences between Recognition and Disclosure: A Comparison of Inputs to Estimate Fair Values of Employee Stock Options. University of Chicago.
• Choudhary, P. (2007, September). Evidence on differences between Recognition and Disclosure: A Comparison of Inputs to Estimate Fair Value of Employee Stock Options. Excellence in Financial Reporting Conference at William & Mary.
• Choudhary, P. (2006, September). Accelerated Vesting of Employee Stock Options in Anticipation of FAS 123-R. American Accounting Association Annual Meeting.
• Choudhary, P. (2006, September). Accelerated Vesting of Employee Stock Options in Anticipation of FAS 123-R. Financial Accounting and Reporting Section Midyear Meeting.
• Choudhary, P. (2005, September). Accelerated Vesting of Employee Stock Options in Anticipation of FAS 123-R. Duke and University of North Carolina Fall Camp.