We provide evidence that firms with more transparent earnings enjoy a lower cost of capital. We base our earnings transparency measure on the extent to which earnings and change in earnings covary contemporaneously with returns. We find a significant negative relation between our transparency...

This study addresses whether asset securitizations are really asset sales or a form of secured borrowing, by estimating cross-sectional equity valuation regressions to assess whether the stock market treats securitized assets and liabilities held by a special purpose entity (SPE) as assets and...

Amendment of IAS 39 by the IASB in 2008 provided an option to reclassify investments from fair value to historical cost. Whereas this option was available to all firms, it was particularly relevant to banks. We predict that “too important to fail” (TITF) banks took less advantage of this...

This study addresses whether firms provide more voluntary disclosures if they redact otherwise mandatorily disclosed contract information, whether firms have higher information uncertainty after they redact, and, if so, the extent to which this higher uncertainty is mitigated by the disclosures....

This study finds that the requirement of ASC 842 for firms to capitalize operating leases in financial statements beginning in 2019 resulted in firms affected by the standard reducing existing debt amounts on average between 7% and 10% relative to unaffected firms. We also find that firms with...

This study uses passage of the Dodd-Frank Act as a setting to examine whether changes in legal liability exposure faced by credit rating agencies affect the number of financial statement information signals required before rating changes. For upgrades, we predict and find that the greater legal...

This study examines whether application of IFRS by non-US firms results in accounting amounts comparable to those resulting from application of US GAAP by US firms. IFRS firms have greater accounting system and value relevance comparability with US firms when IFRS firms apply IFRS than when they...

This study finds that greater asymmetric timeliness of earnings in reflecting good and bad news is associated with slower resolution of investor disagreement and uncertainty at earnings announcements. These findings indicate that a potential cost of asymmetric timeliness is added complexity from...

This study examines the effect of the Jumpstart Our Business Startups Act (JOBS Act) on information uncertainty in IPO firms. The JOBS Act creates a new category of issuer, the Emerging Growth Company (EGC), and exempts EGCs from several disclosures required for non-EGCs. Our findings are...

In this study, we document a significant shift over the past several years from stock option-based compensation to restricted stock-based compensation. Additionally, we evaluate whether stock option grants and restricted stock grants result in similar valuation consequences for firms. We...