We examine determinants and consequences of a turn away from IFRS to local GAAP, thereby exploiting a unique feature of the Swiss setting in which listed firms are allowed to switch from IFRS to Swiss GAAP, all else being equal. We posit that net benefits of IFRS are less for small firms with...

In the absence of quoted prices in active markets, the measurement of fair values is complex and difficult to verify. Prior literature finds that investors discount fair value estimates based on unobservable inputs (i.e., Level 3). However, these value relevance tests cannot discern whether the...

This study examines whether the application of the fair value option (FVO) induces different levels of earnings volatility during the time period from January 2006 until July 2007 using an international sample of 227 banks from 42 countries. Although fair value accounting is generally believed...

This paper examines the influence of institutional factors on the herding behavior of security analysts. Exploiting a unique dataset on the ownership of brokerage houses, we find that analysts from publicly listed brokers are more likely to issue herding forecasts compared to analysts from...

In 2014, the European Union (EU) passed a corporate social responsibility (CSR) directive that mandates large listed firms to prepare non-financial reports beginning from fiscal year 2017 onward. We examine whether firms within the scope of the directive (hereafter, “treated firms”)...

Amendment of IAS 39 by the IASB in 2008 provided an option to reclassify investments from fair value to historical cost. Whereas this option was available to all firms, it was particularly relevant to banks. We predict that “too important to fail” (TITF) banks took less advantage of this...

We examine whether fair value re-measurements on illiquid assets convey useful information to investors. Specifically, we investigate the return relevance of unrealized Level 3 fair value gains and losses (FVGL) for a sample of 219 listed U.S. banks from 2008 to 2017. We find that Level 3 FVGL...

Most prior studies attribute valuation discounts on certain fair valued assets to measurement error or bias. We argue that institutional differences across countries (e.g., information environment or market sophistication) affect investors' ability to process and impound fair value information...

Using a sample of European banks, this paper examines the link between disclosure and its economic consequences. We exploit an exogenous cost of capital shock created by the Greek Sovereign Debt Crisis and analyze banks' disclosure responses to this shock. First, we find that European banks...

We examine the effects of CSR information on stakeholder decision-making, specifically on supply-chain contracting decisions. To obtain plausibly exogenous variation in CSR information, we exploit the 2017 CSR rating coverage expansion from Russell 1000 to Russell 2000 firms (hereafter,...