I investigated whether implementing SOP 97-2, the revenue-recognition standardfor the software industry, reduces earnings informativeness. This standard is particularlyimportant for two reasons: First, its provisions coincide with provisions of SAB 101, thecurrent general revenue-recognition...

The primary purpose of this paper is to investigate the value relevance of fundamental analysis under the types of economic conditions that commonly occur in developing countries. By considering changes in key components of operating performance (e.g., changes in gross margin or changes in...

Managers exercise considerable discretion over how they announce an accounting restatement in a press release. Some firms issue a press release that discloses the restatement in the headline (high prominence). Others provide a press release with a headline on a different subject (for example,...

Numerous influential critics and corporate managers allege that activist investors demand changes that increase short-term stock prices at the expense of long-term shareholder value (“short-termism”). Research to-date focuses on hedge funds. We provide new evidence by using a larger sample...

We find that shorts establish significant positions more than a year before the average restatement announcement, those positions increase as the announcement month approaches, and the largest positions are held in companies that will announce an accounting irregularity that attracts class...

We find the likelihood of forced turnover in the CEO and CFO positions is significantly higher in the aftermath of option backdating than in propensity-score-matched control firms. Forced turnover occurs in about 36 percent of the accused firms. The forced turnover rates for CEOs and CFOs are...

We provide large sample evidence in response to anecdotal accounts that some managers increase corporate share repurchases in response to an increase in short selling. We discover a robust positive association exists between changes in quarterly share repurchases and contemporaneous changes in...

Motivated by the significant capital allocated to repurchasing stock and its potential affect on price discovery, we develop an empirical model of changes in corporate stock repurchases. We find that share price, capital availability, dividend policy, firm size, and operating profitability...

The allegation that activist investors demand changes that increase short-term stock prices at the expense of long-term shareholder value (“short-termism”) has led to extensive research on interventions by hedge funds. Few studies include other private (non-hedge fund) activists, even though...

Prior research shows that companies repurchase stock during quarters with low returns, presumably because the stock is undervalued. We focus on repurchase increases and investigate another motive: Are repurchases increased to provide price support for a stock that, despite recent low returns,...