Using logit-based financial statement analysis, Ou and Penman estimate an earnings predictor (Pr) that also predicts returns. We develop a forecasting model that purges measurement error (i.e., expected earnings) from the Ou and Penman proxy for the market's unexpected earnings. If market...

When analysts issue both earnings and pre-tax income forecasts, they implicitly provide a forecast of income tax expense. We find that these pre-tax income forecasts have a negative (positive) effect on corporate tax avoidance for firms with relatively aggressive (non-aggressive) tax policy. We...

This study examines the effect of equity ownership by managers on a firm's information environment vis-agrave;-vis its effect on analyst forecast accuracy and analyst following. We collect a sample of over 26,000 observations on managerial ownership during 1988-2002 and find that managerial...

This paper examines whether industry efforts to increase uniformity and improve transparency of a non-GAAP performance measure change manager behavior and market perceptions. We find that the frequency of REITs meeting or beating analysts' expectations of funds from operations (FFO) decreased...

Extreme accruals are commonly viewed as tainted by earnings management, contributing to lower quality earnings. We refer to this presumption as the earnings management/quality hypothesis. We directly examine three aspects of the presumed relation between the level of accruals and earnings...

This paper examines whether industry efforts to decrease managerial discretion, increase uniformity, and improve transparency of a non-GAAP performance measure change voluntary disclosure and market perceptions. We find that the frequency of REITs meeting or beating analysts' expectations of...

The Securities and Exchange Commission (SEC) has expressed concerns that managers may manipulate non-GAAP performance measures in an effort to mislead investors. Consistent with this concern, we find that the frequency of REITs meeting (failing to meet) analysts' expectations of funds from...

This study extends the employee stock option literature by examining how the timing of sales of shares acquired at exercise varies with accrual management both before and after the exercise date. We find evidence that accrual management prior to exercise is positively associated with the...

Prior literature suggests that the market underreacts to the positive correlation in a typical firm's seasonal earnings changes, which leads to a post-earnings-announcement drift (PEAD) in prices. We examine the market reaction for a distinct set of firms whose seasonal earnings changes are...

Prior literature suggests that the market underreacts to the positive correlation in a typical firm's seasonal earnings changes, which leads to a post-earnings-announcement drift (PEAD) in prices. We examine the market reaction for a distinct set of firms whose seasonal earnings changes are...