Prior research has demonstrated an association between the magnitude of accrual anomaly-related trading returns and accrual reliability. This study first demonstrates an association between audit quality and accrual reliability. It then links this result and the prior literature to demonstrate...

SFAS 142 made two significant changes to goodwill accounting. First, firms are required to annually test goodwill for impairment. Second, firms are prohibited from systematically amortizing goodwill. In this study, I test whether each of these changes resulted in improved financial reporting, as...

In this study, we provide evidence on the pricing of other comprehensive income (OCI) that differs from most evidence in prior research. Prior archival research has largely concluded that OCI is not priced by investors. In contrast, we provide evidence in the post-SFAS 130 period that OCI is...

Recent studies indicate that both current Ramp;D investment levels and current or recent changes in Ramp;D investment are positively associated with subsequent excess (risk-adjusted) stock returns. The tentative explanation offered for these results is that shares of Ramp;D-intensive firms are...

Numerous studies have used the proportion of anomalous returns earned during earnings announcement intervals as evidence to distinguish between risk and mispricing explanations for those returns. This approach implicitly assumes that returns expected as compensation for risk-bearing are earned...

We investigate the possibility that earnings response coefficients (ERCs) are increasing in total risk (i.e., the sum of systematic and unsystematic risk). As in prior risk-ERC studies, we model firm value by discounting expected dividends at risk adjusted rates. We argue that ERCs increase with...

Investment professionals often suggest that accounting earnings is a more useful indicator of share value if adjusted by substituting current capital expenditures for reported depreciation. We investigate the usefulness of this alternative depreciation measure by comparing the ability of...

This study provides evidence on the potential usefulness of depreciation accounting to investors. We first document the extent to which depreciation numbers reported in accordance with current accounting standards improve accounting earnings as a source of information for valuing firms'...

This study investigates the extent to which potential financial reporting benefits from capitalizing and amortizing Ramp;D costs depend on increasing the level of discretion permitted to financial statement preparers. To provide evidence on this issue, we examine the impact of alternative...

This study seeks to find evidence of misallocation of invested capital caused by opportunistic earnings management. Investors, if unable to detect the direction and magnitude of the managed portion of reported earnings, may tend to over-value firms practicing income-increasing earnings...