Equity trading volume is increasingly moving to dark venues from lit exchanges. Theory provides opposing predictions about the effect of dark trading on stock price crash risk. The price efficiency theory predicts a negative relation while the liquidity externality theory predicts a positive...

We examine managers’ earnings forecasts for evidence of incentive alignment or subversion characteristics. We find that forecasts by managers compensated via relative performance (RP) goals are more likely to be pessimistic and less accurate than those by managers compensated via absolute...

US companies are increasingly responding to demand from investors and other stakeholders for transparent information about companies’ environmental, social, and governance (ESG) performance by issuing ESG reports on a voluntary basis. We examine whether these reports help to resolve the...

We propose a parsimonious metric – the Adjusted Benford score (AB-score) – to improve the detection of financial misstatements. Based on Benford's Law, which predicts the leading-digit distribution of naturally occurring numbers, the AB-score estimates a firm-year's likelihood of financial...

Prompted by concerns that high frequency traders (HFTs) reap unfair advantages over other traders by using faster trading technologies, regulators are contemplating measures to slow down equity markets. Currently, HFTs account for a significant fraction of the total market volume. Although...

A stream of literature shows that human attention constraints affect asset pricing in predictable ways. When traders are distracted, stock prices tend to initially underreact to earnings news and then gradually incorporate the news over subsequent weeks. In modern markets, however, the majority...