Data
Sample Selection
My sample consists of 193,803 firm-quarters and 8,804 firms that span from the second
quarter of 1996 to the fourth quarter of 2007. They represent the intersection of nonfinancial
and nonutilities firms that have the violation data, the nonmissing data to calculate the
discretionary accruals, and the nonmissing data for the control variables used in the main
regression model.