Because stock liquidity should improve managers’ access to external information, we examine whether managers of firms with higher stock liquidity form more accurate accrual estimates. Consistent with our expectations, we find that accrual estimation errors of firms with more liquid stocks are...

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...

Using income smoothing and its two components – the informational component and the garbled component – we examine whether and how the time-oriented tendency embedded in languages influences corporate financial reporting decisions. Separating languages into weak- versus strong- future time...

Accounting rules for valuing retained interest from securitizations require management to make assumptions concerning discount rates, default rates, and prepayment rates. These assumptions provide management with discretion to determine the “gain on sale” of the receivables. We investigate...

Valuation theory, investment managers, financial analysts, and textbooks advocating horizontal financial statement analysis suggest that the change in earnings growth (earnings acceleration) conveys value relevant information. We test this assertion using a large sample of U.S. firms. Results...

This study tests whether naiuml;ve 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...

This paper draws on two distinct literatures ndash; one that investigates the impact of accounting restatements and another that investigates the trading behavior of short sellers ndash; to further our understanding of how sophisticated investors process and respond to news about accounting...

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...

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,...

We examine the stock price reaction to management's disclosure of internal control weaknesses under sect;302 of the Sarbanes Oxley Act and to the characteristics of these weaknesses, controlling for other material announcements in the event window. We find that some characteristics of the...