This paper studies how an accountant's method of aggregating information in a financial report is affected by differences in the reliability and relevance of components of the report. We study a firm that hires an accountant to produce a report that reveals information to investors regarding the...

This paper discusses Hirshleifer and Teoh's modeling and analysis of "inattentive investors," stock price valuation, and accounting recognition rules and disclosures. The paper derives many plausible empirical predictions from an equilibrium model in which some investors do not process...

Numerous rules mandate the disclosure of information. This article analyzes why such rules are enacted. Specifically, 1) why wouldn't firms voluntarily disclose their private information; and 2) given that voluntary disclosure would not be forthcoming, who has the incentive to lobby for...

In this paper I attempt a taxonomy of the extant accounting literature on disclosure and suggest as categories: "association-based disclosure," work that studies the effects of disclosure on asset equilibrium prices and trading volume; "discretionary-based disclosure," work that examines...

We model limited attention as incomplete usage of publicly available information. Informed players decide whether or not to disclose to observers who sometimes neglect either disclosed signals or the implications of non-disclosure. In equilibrium observers are unrealistically optimistic,...

Several recent empirical papers assert that the decision to disclose an earnings forecast shortly before the actual earnings announcement reveals only short-term information and is therefore unlikely to entail proprietary costs. Using a simple dynamic model of voluntary disclosure, we show that...

We analyze how, in the absence of capital market incentives, the influence of existing competition on voluntary disclosure is an evolving process which has a non-monotonic design. The progressive capability of rivals to forecast significant information and the increasing losses of abnormal...

Corporate-level fraudulent activity has instilled a state of concern and heightened awareness in investors, the media and employees alike as perceived sensitivity to illegal behavior continues to increase. With corporate giants such as Enron, Tyco and Health South being prime examples of this...

Financial restatements are costly, but frequent, events and many firms restate several times. This paper asks why rational managers engage in misreporting, in spite of the costly consequences. We present a simple extension to the Fischer and Verrecchia (2000) model, which provides testable...

We examine a potential path to value-creation by cybersecurity investments: a reduction in a firm's cost of capital. Building on the existing literature on corporate finance, we suggest that given the business-ending threats of cybersecurity incidents and the importance of cybersecurity...