We analyze a sample of 330 firms making unaudited disclosures required by Section 302 and 383 firms making audited disclosures required by Section 404 of the Sarbanes - Oxley Act. We find that Section 302 disclosures are associated with negative announcement abnormal returns of -1.8 percent, and...

We hypothesize that oil and gas producers' 10-K market risk disclosures, recently mandated by SEC Financial Reporting Release Number 48 (FRR No. 48), convey useful information to investors about commodity betas (defined as the sensitivity of firms' equity price changes to commodity price...

This paper examines the liquidity, Tobin's Q, and cost of equity effects from voluntary and mandatory IFRS adoption. In contrast to prior work, we focus on the firm level heterogeneity in the economic consequences, recognising that the level of uncertainty avoidance (UAI) in a country will...

The SEC mandates firms to inform investors about their assessment of future contingencies in their 10 Ks. However lengthy and complex disclosures – mostly for dozens of firms in an investor’s portfolio – can barely be processed by a human being. To cope with the flood of information, we...

We examine the impact of financial regulation policy uncertainty on mispricing of earnings among banks, which are heavily regulated and strongly influenced by such policies. The tension underlying our study stems from two opposing effects. To the extent that economic uncertainty generated by the...

This study examines the informativeness of firm disclosures related to COVID-19 in earnings conference calls and annual reports (10-K) during the first quarter of 2020 when firms face tremendous uncertainty and little regulatory guidance. We find that investors react to COVID-19 related...

Using the Tick-Size Pilot Program, we show that tick-size increases in treated firms cause a significant reduction in stock price crash risk. Earnings management and algorithmic trading are the two key channels of impact. We also show that sophisticated investors such as short-sellers are...

This study shows that less readable 10-K reports are associated with higher stock price crash risk. The results are consistent with the argument that managers can successfully hide adverse information by writing complex financial reports, which leads to stock price crashes when the hidden bad...

In this study, we examine how banks' stock price crash risk is affected by recourse uncertainty embedded in securitizations. By recourse uncertainty, we mean the difficulty for equity market participants to assess the true extent of risk transfer between securitizing banks and investors in...

We investigate whether non-GAAP earnings disclosures increase stock price crash risk. Consistent with the notion that non-GAAP reporting allows managers to downplay reported bad news in GAAP earnings and re-direct investors' attention to the more positive aspects of performance, our empirical...