This paper studies the role of financial reporting in enhancing the credibility of other sources of information. We find that an interim accounting report can discipline management's investment behavior and its effectiveness increases with accounting quality. As a consequence, when accounting...

We ask whether the quality of internal information matters for investment decisions. We predict that investment is more sensitive to internal profit signals and less sensitive to external price signals when managers have higher quality internal information. Consistent with recent theoretical and...

TThere has been debate over the economic consequences of accounting conservatism in debt contracting. We contribute to this debate by arguing that the prospect of signaling project return may give rise to the demand for conservative accounting, even though it may not improve contracting...