||Essay I: Do Acquirers Disclose Good News or Withhold Bad News When They Finance Their Acquisitions Using Equity? Companies that use their own stock to finance acquisitions have incentives to increase their market values prior to the acquisition date. This study examines whether such companies mislead investors by strategically issuing overly optimistic forecasts of future earnings (“deception by commission”) or by withholding bad news about future earnings (“deception by omission”). I find that stock swap acquirers do not issue overly optimistic earnings forecasts before the acquisition. In contrast, I find strong evidence that stock swap acquirers withhold impending bad news about future earnings. Consistent with studies in philosophy and psychology, my findings suggest that “deception by commission” is more costly than “deception by omission”. Essay II: Changes in Auditors’ Internal Control Opinions and Changes in the Quality of Clients’ Financial Reporting The Sarbanes-Oxley Act (SOX) requires auditors to issue opinions about the effectiveness of clients’ internal controls over financial reporting. Prior studies document that internal control opinions have become more favorable over time with fewer deficiencies being noted by clients’ auditors. This study examines whether these apparent improvements in internal control are manifest in greater financial reporting quality. I find a significant fall in the likelihood that the same client issues misstated financial accounts when there is a reported improvement in the client’s internal control environment. This finding suggests that the reported changes in internal controls do reflect real improvements to internal control quality. Moreover, the changes in internal control reports are significantly more informative about accounting quality when the opinions are issued by Big Four audit firms rather than non-Big Four firms. However, I also show that companies strategically dismiss auditors who give unfavorable internal control opinions in order to increase the likelihood of receiving a subsequent clean opinion. Consequently, the reports issued by auditors have become more favorable over time even for the clients that display no apparent improvement in internal control quality.