This study investigates the effect of a security regulation that occurs concomitantly with International Financial Reporting Standards (IFRS) adoption on the information content of earnings announcements in Italy. To identify the effect of this regulation, we use a treatment (i.e., Italy) and a...

Organization's environmental uncertainty induces greater variability in reported earnings, and accentuates the information asymmetry between managers and outside stakeholders. Managers have the incentives to reduce such variability via income smoothing and hence reduce information asymmetry for...

We study the impact of earnings management prior to bankruptcy filing on the passage of firms through Chapter 11. Using data on 261 U.S. public firms, we construct three measures of earnings management, two of which are accounting (accrual) manipulation measures (discretionary accruals and...

Deferred tax and accruals have the characteristic of causing reported earnings to be above or below normal. Both are permitted to be used by companies in financial reporting. This study examines whether large deferred taxes and large accruals have an impact on the relationship between earnings...

The literature on ‘cash flow' or ‘earnings' beta is theoretically well-motivated in its use of fundamentals, instead of returns, to measure systematic risk. However, empirical measures of earnings beta based on either log-linearizing the return equation or log-linearizing the clean-surplus...

This paper presents a model of financial reporting in which investors infer both pre-managed earnings and the precision of earnings from reported earnings. Over-reporting earnings has two opposing pricing effects: investors infer higher pre-managed earnings from an inflated positive earnings...

In this paper we analyze the preference for earnings management techniques by the family firms and the impact of the same on the performance of the firm. Family firms contrary to non-family firms are driven by different objectives. Using socio emotional wealth theory, we hypothesize that family...

We show that a lack of investor trust affects the revision of cash flow expectations and delays the incorporation of accounting information into the stock price. To overcome investors' dependence on trust, managers can obtain external certification—either through credit ratings or by employing...