Prior research finds that the Sarbanes-Oxley Act (US-SOX) of 2002 has affected earnings management in the United States. Cohen et al. (2008) indicate that accrual-based earnings management has declined since the passage of US-SOX, while real earnings management has increased. Further, Gilliam et...

This study examines the incremental information in loss firms' non‐GAAP earnings disclosures relative to GAAP earnings. Using a large sample obtained through textual analysis and hand‐collection, we posit and find that loss firms' non‐GAAP earnings exclusions offset the low informativeness...

Researchers in accounting have recently provided evidence of a striking increase in the usefulness of earnings announcements based on stock market price and volume reactions (Beaver et al., 2018; Barron et al., 2018). Price reactions, however, are unable to capture investor disagreement and volume...

This monograph provides a thorough review of earnings quality issues and analysis. Its primary objectives are to help gain a deep understanding of earnings quality and facilitate the development of comprehensive, granular, and contextual earnings quality indicators and analyses. While there are...

We compare non-GAAP earnings and segment earnings determined by ASC 280’s Management Approach, both of which afford managers flexibility in defining performance. This comparison is relevant because (1) standard setters are considering expanding the use of internally viewed information in...

Motivated by regulatory assertions that the purpose of SOX was to restore investor confidence in the securities markets, we examine changes in the stock market reaction to earnings restatements following the implementation of SOX in order to evaluate whether the Act's reforms have had a...

Recent studies have questioned the validity of the Basu asymmetric timeliness of earnings (AT) as the proxy for accounting conservatism. An important basis for the criticism is the negative association observed between AT and market-to-book ratio (MB), another proxy for conservatism. Drawing...

This teaching guide is based on a comprehensive survey as well as in-depth interviews of Chief Financial Officers (CFOs). We ask the CFOs about the definition and drivers of earnings quality, with a special emphasis on the prevalence and detection of earnings misrepresentation. CFOs believe that...

While it is widely acknowledged that companies face increasing cybersecurity risk stemming from hackers stealing customer information, a relatively unknown cybersecurity risk is from information leakage and subsequent trading by digital insiders – hackers who target corporations to obtain...

The safe harbor provisions have increased over the years, following the Private Securities Litigation Reform Act (PSLRA) of 1996 and the Securities Litigation Uniform Standards Act (SLUSA) of 1998. The objective is to encourage more earnings guidance by managers. However, a number of firms like...