Easterwood and Nutt (1999) show that analysts under-react to bad news in past earnings changes (or forecast errors) but over-react to good news in past earnings (or forecast errors) consistent with analysts exhibiting systematic optimism. We find that their results are sensitive to the cutoff...

Fudenberg and Tirole (1995) analytically demonstrate that income smoothing can arise in equilibrium if managers are concerned about job security. Consistent with their model, DeFond and Park (1997) show that managers smooth income in consideration of both current and future relative performance....

We provide evidence on the effects of SFAS 133 on the risk relevance of accounting measures of bank derivative exposures to bond markets. First, we find that interest rate derivatives classified as hedging are more negatively associated with fixed-rate bond spreads after SFAS 133. We also find...