In addition to being a function of traditional fundamentals such as cash-flow persistence and the discount rate, the equilibrium association between a security price and a value-relevant statistic can simply be a function of what rational investors believe the association will be. We refer to...

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 examine two distinct channels through which going concern opinions can be associated with the likelihood of bankruptcy: auditors have better access to information about their clients' bankruptcy risk and going concern opinions directly induce bankruptcies. Using a bivariate probit model that...

We examine two distinct channels through which going concern opinions can be associated with the likelihood of bankruptcy: auditors have better access to information about their clients' bankruptcy risk and going concern opinions directly induce bankruptcies. Using a bivariate probit model that...