This paper investigates whether maintaining a reputation for consistently beating analysts' earnings expectations can motivate executives to move from “within GAAP” earnings management to “outside of GAAP” earnings manipulation. We analyze firms subject to SEC enforcement actions and...

This study examines the relation between the degree of innovation disclosed in new product announcements (NPAs) and future firm performance. Using a new text-based measure of the amount of innovation disclosed in NPAs, we find that higher innovation disclosure predicts favorable future sales and...

A firm in steady state generates predictable income and investors can generally agree on valuation. However, when a significant corporate event occurs this creates greater uncertainty and disagreement about firm valuation and investors could prefer to avoid holding such a stock. We examine...

What are the implications of major customer dependency, i.e., the degree of a supplier firm's dependency on its major customers, for external auditors? While the conventional view emphasizes the negatives of major customer dependency for client business risk, we find that suppliers with more...

We use the IPO setting to provide evidence that accounting measures of valuation uncertainty combine with short-sales constraints to generate significant equity market mispricing. The IPOs that we predict to be most susceptible to overpricing in the immediate aftermarket have first-day returns...

Previous research finds that EPS growth is difficult to predict and reasons that much of the observed variation in valuation multiples is due to mispricing (e.g., Lakonishok, Shleifer, and Vishny, 1994; Chan, Karceski, and Lakonishok, 2003; Israel, Laursen, and Richardson, 2021). We revisit these...

We investigate the impact of a firm's compensation consultant choice on executive compensation by examining shifts in consultant choice following a 2009 US Securities Exchange Commission requirement that firms disclose fees paid to compensation consultants for both consulting and other services....

We examine the implications of auditor education for audit quality and audit pricing. We exploit a novel institutional setting in the UK, where auditors major in many different degrees at university and signing auditors are identifiable. Using hand-collected data for a large sample of signing...

It is well documented that accounting measures of investment, such as working capital and capital expenditures, negatively predict future stock returns. The earnings fixation hypothesis suggests that investors overestimate and overvalue the persistence of the accrual component of earnings....

In 2013 new regulations that required enhanced disclosure in remuneration reports were enacted in the UK. Using a sample of FTSE 100 companies from 2011-2013, this paper:1) describes voluntary and mandated disclosure behaviour in response to the enhanced disclosure requirements; and 2) examines...