Tax avoidance that reduces transfers from shareholders to the government is traditionally viewed as value enhancing to shareholders. The agency perspective of tax avoidance, however, suggests that opportunistic managers may exploit the obfuscatory nature of tax avoidance to mask rent extraction....

Recent studies indicate that both current Ramp;D investment levels and current or recent changes in Ramp;D investment are positively associated with subsequent excess (risk-adjusted) stock returns. The tentative explanation offered for these results is that shares of Ramp;D-intensive firms are...

Numerous studies have used the proportion of anomalous returns earned during earnings announcement intervals as evidence to distinguish between risk and mispricing explanations for those returns. This approach implicitly assumes that returns expected as compensation for risk-bearing are earned...

In this study, we exploit the unique reporting requirements for employee stock options to provide large sample evidence on the accuracy of footnote disclosures related to a specific complex estimate, the fair value of options granted. We first document the frequency and magnitude of differences...

We survey commercial bank lenders to better understand how they evaluate and react to variation in financial statement quality and how they view recent changes in accounting standards. A unique aspect of this study is that our respondents focus on medium-size loans to private companies. In fact,...

This study examines the effect of product market competition on managerial disclosure of earnings forecasts using large reductions in U.S. import tariff rates to identify an exogenous increase in competition for domestic firms in U.S. product markets. Our difference-in-difference estimations...

We examine the extent of implicit taxes at the corporate level and the effect on implicit taxes of the Tax Reform Act of 1986 (TRA86). Using a variety of specifications, we find consistent evidence that implicit taxes eliminate virtually all of the cross-sectional differences in explicit tax...

This study investigates the extent to which potential financial reporting benefits from capitalizing and amortizing Ramp;D costs depend on increasing the level of discretion permitted to financial statement preparers. To provide evidence on this issue, we examine the impact of alternative...

In 1999, the Financial Accounting Standards Board proposed changes in the accounting for business combinations and intangibles that would significantly increase the level of goodwill amortization in corporate income statements. In an effort to make goodwill accounting more transparent, the...

In this paper, we provide evidence on the potential informational benefits of capitalizing and amortizing Ramp;D costs by comparing the extent to which financial statements that reflect alternative Ramp;D accounting schemes explain the cross-sectional distribution of share prices. We find that...