In this study, we examine the effect of investor sentiment on the stock market reaction to earnings news (i.e., the earnings response coefficient or ERC) for loss firms. We find that the ERC for loss firms' earnings increases is less positive as sentiment increases, contrary to the findings in...

We investigate whether a firm's market power within its product market affects management sales forecast behavior. Our examination of the relation between market power and management sales forecasts is motivated by the notion that sales forecasts differ from other types of forecasts because...

We examine the effect of accounting conservatism on earnings persistence and the stock market's valuation of earnings. Using a sample of U.S. companies during the period of 1988-2010, we find that firms with more conservative accounting generate less persistent earnings than firms with less...

This study examines the relation between principles-based standards and earnings attributes. We create a firm-year specific variable that measures the extent to which firms' financial reporting is affected by principles-based standards. We find that firms' earnings are more informative and...

We examine the effect of interpretive accounting guidance on a direct and observable cost of financial reporting: audit fees. Many contend that U.S. GAAP has too much interpretive guidance, making it complex and difficult to assimilate. This effect would lead to higher audit effort and higher...

PurposeThe aim of the paper is to investigate the associations between hedge fund activism and corporate internal control weaknesses.Design/methodology/approachIn this paper, the authors identify hedge fund activism events using 13D filings and news search. After matching with internal control...

This study examines whether managerial entrenchment is associated with firms’ financial statement comparability. We find that managerial entrenchment has a significant negative effect on financial statement comparability, providing new insights into the internal, managerial effects on...