We investigate the effect of stock option backdating on the information risk of accused companies. This research provides evidence concerning the consequences that a change in this risk may have on equity values after discovery that companies participated in this questionable behavior. We...

Our study assesses whether SFAS No. 131 improved disclosure about the diversity of multiple segment firms' operations. We find a post-SFAS No. 131 increase in cross-segment variability of segment profits, an increase in the association between reported and inherent cross-segment variability, and...

This study investigates the effect of firms' adoption of SFAS No. 131 segment disclosure rules on the stock market's ability to predict the firms' earnings, as captured by the forward earnings response coefficient (FERC). The FERC is the association between current-year returns and next-year...

We examine the usefulness of other comprehensive income (OCI) to debt investors in nonfinancial companies. Motivated by Merton's (1974) real options framework, we construct a measure of incremental OCI volatility, designed to capture the effect of OCI on overall firm asset volatility, which is a...

This study examines whether financial statement comparability plays a significant role in mitigating costs of capital in the market for seasoned equity offerings (SEOs). The FASB refers to comparability as a qualitative characteristic of financial reporting that enhances the decision-usefulness...

UK's fiscal profligacy is exacerbating the downturnIn the twenty-sixty IEA Discussion Paper, Professor David B. Smith examines M4X as a measure of the supply of broad money.It has been argued that quantitative easing (QE) is designed to prevent a collapse of broad money. However, the official M4...

How our current system of high and complicated taxes are damaging economic growthThe features that should be found in a well-designed tax system and have been known since Adam Smith’s maxims appeared in Volume 2 of The Wealth of Nations in 1776. A well-designed tax system should have the...