This article provides evidence about the wealth change and redistribution effects of Section 404 of Sarbanes-Oxley (SOX), which requires that management assess and publicly report on the effectiveness of their firm's internal controls, and that auditors publicly provide an opinion on...

We investigate the use of a warrant-pricing approach to incorporate employee stock options (ESOs) into equity valuation and to account for the dilutive effect of ESOs in the valuation of option grants for financial reporting purposes. Our valuation approach accounts for the jointly determined...

This paper investigates whether the notional amounts of derivative financial instruments contain relevant information about derivatives risk. The issue is addressed using a derived relation between the sensitivity of equity return to currency fluctuations (hereafter, FX sensitivity) and the...

We investigate the use of a warrant-pricing approach to incorporate employee stock options (ESOs) into equity valuation and to account for the dilutive effect of ESOs in the valuation of option grants for financial reporting purposes. Our valuation approach accounts for the jointly determined...

We investigate whether corporate managers' stock repurchase decisions are affected by their incentives to manage diluted earning-per-share (EPS). We find that managers increase the level of their firms' stock repurchases when: (1) the dilutive effect of outstanding employee stock options (ESOs)...

This study investigates whether the quantitative disclosures about notional amount and fair value of foreign exchange derivatives, required by Statement of Financial Accounting Standards (SFAS) No. 119 and its predecessors are associated with the information used by investors to assess the...

This paper investigates whether Statement of Financial Accounting Standards No. 119 (SFAS 119) disclosures are useful for assessing the sensitivity of a firm's equity return to currency fluctuations (currency exposure). First, the study demonstrates how the notional amount and fair value of...

SFAS 109 allows firms to use their discretion to set arbitrarily high valuation allowances against deferred tax assets. Firms can then later use these quot;hidden reservesquot; to manage earnings. Our evidence indicates that most banks do not record a valuation allowance to manage earnings, but...