Revenues and expenses are fundamentally proportional to one another, but are likely to be disproportionally affected by transitory items or economic shocks. We build on this observation and propose a new measure of sustainable earnings based on deviations from normal profit margins. While some...

Though ample empirical evidence alludes to the importance of disaggregated accounting data in the context of earnings management, extant accounting theory considers biases in reporting earnings mostly at the aggregated level of the reported earnings. By analyzing reporting manipulations at the...

This study examines investor reaction to return on common equity (ROCE) and its components around the announcement of quarterly earnings. It is an issue that the accounting literature has not examined, notwithstanding the importance of ratio analysis in general and the DuPont decomposition in...

Prior literature shows government corruption mostly hurts poorer economies, whereas recent events, including the 2008 US economic crisis, suggest business corruption may harm growth in wealthier economies. Using multi-national surveys in which citizens communicated their perceptions of...

We examine the relation between insider trading and corporate disclosure of cyberattacks. We distinguish between companies that voluntarily disclosed cyberattacks and those that withheld information on the incidents, and parties outside the attacked company later discovered the incident. We find...

Using daily stock returns, we estimate the precision of information during earnings and non-earnings announcement days, and find that although the precision of information in daily stock returns increases during earnings announcement days, it explains less of the variation in expected returns...

Many countries use tax-related whistleblowing programs, but the evidence on these programs suggests information provided by whistleblowers yields modest tax collections. However, when every citizen could become a whistleblower, deterrence from tax evasion can by itself increase tax collections....

We show negative stock returns reverse more and contain less information on the long-term changes in share prices than positive stock returns mostly on nondisclosure days, and these information differences between negative and positive returns decrease substantially on disclosure days. The...

Firms should disclose information on material cyber-attacks. However, because managers have incentives to withhold negative information, and investors cannot discover most cyber-attacks independently, firms may underreport them. Using data on cyber-attacks that firms voluntarily disclosed, and...

This study explores motivations underlying managers' resource adjustments. We focus on the impact of incentives to meet earnings targets on resource adjustments and the ensuing cost structures. We find that when managers face incentives to avoid losses or earnings decreases, or to meet financial...