We provide evidence that managers use the discretion afforded by fair-value accounting rules to manage the size of reported securitization gains. We show that the ambiguity allowed in discount rate choice is one way that managers can influence these gains. We investigate whether CEO compensation...

We find that the perverse effect of equity incentives on financial misreporting is weaker for older chief financial officers (CFOs) than for younger CFOs. We attribute this to differences in risk preferences associated with age. Consistent with our attribution, we find that the difference is...

This paper studies how firm disclosure activity affects the relation between current annual stock returns, contemporaneous annual earnings and future earnings. Our results show that firms with relatively more informative disclosures "bring the future forward" so that current returns reflect more...

We examine the relation between the transparency of disclosures about activity in valuation allowance and reserve accounts and accruals-based earnings management. We classify disclosures as being transparent if they provide detailed information about activity in the allowance and reserve...

In this study, we examine the effect of accrual-based earnings management on the association between managers' earnings forecast errors and accruals, which we label “managers' accrual-related forecast bias.” We build on extensive research which finds that managers engage in accrual-based...

We provide evidence suggesting that managers use financial statement misstatements which improve reported results to facilitate acquisitions. Specifically, we find that firms misstating their financial statements are more likely to make stock-based acquisitions, but not cash-based acquisitions,...

This study tests whether naïve trading by individual investors, or some class of individual investors, causes post-earnings announcement drift (PEAD). Inconsistent with the individual trading hypothesis, individual investor trading fails to subsume any of the power of extreme earnings surprises...

In this study, we examine whether audit committee accounting expertise helps to promote audit quality by motivating auditors to conduct diligent internal control audits and make appropriate internal control assessments because audit committee accounting expertise safeguards auditors from...

We examine the effect of media competition on analyst forecast properties in an international setting using 113,436 firm-year observations from 32 countries spanning 2000 through 2012. We find that firms in countries with stronger media competition enjoy more accurate, less optimistically...

Prior studies use fundamental earnings forecasts to proxy for the market's expectations of earnings because analyst forecasts are biased and are available for only a subset of firms. We find that as a proxy for market expectations, fundamental forecasts contain systematic measurement errors...