Activist short-sellers could play an information role in capital markets by disclosing informative short-theses, or, as many are concerned, a manipulation role by spreading misinformation. To shed light on this controversy, this paper focuses on a powerful setting where both roles are heightened...

We examine the effect of auditor conservatism on corporate innovation. We hypothesize that because conservative auditors constrain income-increasing accounting discretion, managers may sacrifice long-term investments in innovation to boost current earnings and meet short-term performance...

Prior analyst literature focuses on the impact of financial analysts on the firms they cover, and prior information-transfer literature concentrates on the externalities of information provided by management. This paper fills gaps in both streams of literature by examining the focal firm's...

Companies' earnings conference calls are perceived to be venues for sell-side equity analysts to ask management questions. In this study, we examine another important conference call participant — the buy-side analyst — that has been underexplored in the literature due to data limitations....

We examine if and when investors systematically respond to SEC comment letters focusing on comment letters that contain tax-related issues. Using a sample of more than 10,000 comment letters from the Audit Analytics' SEC Comment Letter Database, we identify comment letters related to tax issues....

Accounting big baths are pervasive in practice. While big baths can improve the information environment and reduce information asymmetry, they can also degrade the information environment and obscure operating performance. In this study, we examine the role of management ethics. Specifically, we...

This paper examines the role that exchange-traded funds (ETFs) play in the transfer ofinformation across firms around earnings announcements. Our analysis focuses on the differencesin information transfer between broad-based and sector ETFs. We find that firms with sector ETFownership are...

From the sociolinguistic perspective, this study examines whether the honorific and actual-name appellations that Chinese auditors use to address clients in audit reports connote differential financial misstatement risk. Specifically, we hypothesize that auditors' use of honorifics signals their...

This paper examines the impact of teamwork on sell-side analysts' performance. Using a hand-collected sample of over 50,000 analyst research reports, we find that analyst teams issue more than 70% of annual earnings forecasts. In contrast, most prior research implicitly assumes that forecasts...

This paper provides early but broad empirical evidence on a major new investor protection regulation in Europe, MiFID II, which requires investment firms to unbundle investment research from other costs they charge to clients. We predict that the price separation resulting from unbundling and a...