We examine the impact of corporate risk-taking on firm-level real earnings management. We find that firms with higher risk-taking engage in higher real earnings management. Our results are robust to a series of robustness tests, including simultaneous least squares approach, firm fixed effect,...

The present research attempts to investigate the relationship between agency problems that rise due to the free cash flow with long term profitability and income management; and also the effects of the structure of ownership on income management. The criterion used for measuring long-term...

We investigate an emerging pay-performance activism under a natural setting of performance-focused shareholder proposals rule (PSPs) (Rule 14a-8) established by the Securities and Exchange Commission (SEC) for top management compensation. We find that: (1) PSP sponsors successfully identify...

Purpose: This study examines the moderating impact of corporate governance quality on the relation between CEO bonus compensation and accounting conservatism. Design/methodology/approach: We use market-based and accrual-based measures to estimate accounting conservatism. According to prior...

We argue that contracting with the federal government involves significant proprietary information cost due to regulations requiring contractors to provide confidential information, which may then become available to outsiders via Freedom of Information Act (FOIA) requests. We provide evidence...

In this paper, we investigate the effect of shareholder activism on earnings management. Using a US sample of shareholder pay-for-performance proposals sponsored by institutional investors, we find that when compared to control firms, firms targeted by shareholder proposals have a greater...

Bank holding companies (BHCs) can be complex organizations, conducting multiple lines of business through many distinct legal entities and across a range of geographies. While such complexity raises the costs of bank resolution when organizations fail, the effect of complexity on BHCs' broader...

This paper examines the composition of supervisory boards of German banks for a sample of 41 large banks in the period 1999-2006. We find that the supervisory board structure reflects both outside control by shareholders and inside control by stakeholders. Most of the non-employee board members...

This article questions the allocation of control rights to venture capitalists with particular focus on liquidation decisions. The literature has shown that the venture capitalist acts as the principal to prevent the agent (i.e., the entrepreneur) from pursuing private objectives and destroying...