Although theory suggests that companies would rationally select into audit even if it were not a legal requirement, many countries impose mandatory audits. This is arguably due to an audit having elements of a public good, which may result in not enough audits being purchased without regulatory...

In the UK, SSAP 13 requires that firms immediately expense most of their R&D expenditures.The reported earnings of high-R&D expenditure firms are therefore likely to convey less valuerelevantinformation to investors than those of less research-intensive firms. Using a sample offirms from the...

In the UK, SSAP 13 requires that firms immediately expense most of their Ramp;D expenditures. The reported earnings of high-Ramp;D expenditure firms are therefore likely to convey less value-relevant information to investors than those of less research-intensive firms. Using a sample of firms...

We examine the practice of share repurchases in the UK. We find that an important regulatory reform in 2003, which relaxed previously strict rules about repurchases, was followed by a significant increase in repurchase activity by UK listed firms. However, unlike in the US, repurchases remain a...

In 2003, a new UK corporate governance Code recommended that the CEO should not become chairman of the same firm. The UK regulator, adopting an agency theory perspective, argued that this prevents powerful CEOs from clinging to power, to the detriment of firm performance. An alternative...

In this paper, we extend previous work on the relationship between corporate distributions and market value. Adopting an information content perspective, we study the relationship between both market value and future earnings and regular dividends and share buybacks, controlling for other...

Why do firms pay dividends? This is a question which has long interested researchers, particularly since the dividend irrelevance proposition of Miller and Modigliani (1961) because, even though their theory (which relies on several assumptions) suggests investors are indifferent between a...

Unusually high accounting accruals are observable to sophisticated investors, who must then decide whether the accruals represent managerial manipulation of reported earnings or an indication of future firm performance. We hypothesise that both cash and stock dividends contain information useful...

This paper examines share price behaviour surrounding announcements of CEO departures from UK firms listed on the All Share Index between 1990 and 1995. We find that many firms choose not to announce CEO departures, and that these firms have poorer performance records, and higher chances of...