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...

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...

Prior research on meeting or beating earnings expectations focuses on managers' incentives to keep stock prices inflated by avoiding negative earnings surprises. However, in certain situations, managers may be motivated to depress stock prices in order to maximize their utility. We hypothesize...

We investigate patterns of earnings management by the acquiring firm in a merger, considering both the form of payment and the target firm's listing status. We find that the acquiring firm is more likely to report income-increasing abnormal accruals when it uses stock to acquire a privately held...

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...

This study extends previous research that documents a stock price reaction leading accounting earnings. The primary issue is that prior studies use a naive earnings expectations model (random walk) as the benchmark for the information content of lagged returns and do not adequately address the...

Khan and Watts (2009) develop a firm-year measure of conditional conservatism, labeled C_Score, that builds on the Basu (1997) asymmetric timeliness (AT) measure. However, recent research documents an asymmetric relation between lagged earnings and current returns, indicative of bias in the Basu...

The executive compensation literature presumes that shareholders offer risk-averse managers stock options to entice them to take on more risk, resulting in riskier investment decisions and thus a greater return on investment. However, recent empirical work challenges this assumption, and...