Although executives often mention signaling undervaluation as a motivation for accelerated share repurchases (ASRs), managing earnings per share (EPS) has been argued as a key alternative motivation in the financial press. The results reveal that 29 percent of ASR firms (i.e., EPS-suspect firms)...

This paper investigates whether financially constrained firms use costly audit signals to facilitate their access to external financing. We document that when facing higher financial constraints, firms pay higher audit fees and have their audit opinion reports completed sooner. The higher audit...

We examine whether chief financial officers (CFOs) with accounting backgrounds (accountant CFOs) are associated with more conservative corporate outcomes. We find that, in high-growth industries, firms with accountant CFOs invest less in research and development and capital expenditures and are...

This paper examines how constraints on firms' financing capacity relate to managers' discretionary accounting choices. Three hypotheses of earnings management — the opportunism hypothesis, the rational expectations hypothesis, and the signaling hypothesis — predict that constrained firms...

The value relevance of financial statements is of great significance to investors and standard setters. The present research examines whether accounting comparability among industry peers enhances the value relevance of earnings and book value. This is an important question because both the...

We propose a new input-based measure of financial statement comparability (FSC) that captures the degree of overlap in the financial statement line items reported by industry peers. FSC quantifies the extent to which peer firms have similar economic events and accounting transactions as...

Changes in firms’ warranty payments are informative signals that enable investors to form timely expectations about potential changes in product quality. The authors’ survey shows that warranty payments affect potential investors’ product quality assessments and stock investment...

This study examines the economic consequences of going concern audit reports (GCARs) in nonprofit charitable organizations (NPOs) using a sample of public charities that received initial GCARs between 1998 and 2003. I find that GCARs are negatively correlated with subsequent government grants....

Chinese companies have accessed the public capital markets of the US and Canada more frequently in recent years. This paper provides for the first time empirical evidence documenting the characteristics of private securities class action lawsuits (filed in the US and Canada) against Chinese...