We use a proprietary database of institutional investors' daily stock transactions to examine transient institutions' trading behavior in response to announcements of small negative earnings surprises (defined as quarterly earnings that fall short of analysts' consensus forecasts by one cent)....

This paper investigates the association between corporate governance and the disclosure of non-GAAP earnings measures in quarterly earnings announcements. The results reveal that the previously documented decrease in the probability of disclosure of non-GAAP earnings after Regulation G is lower...

This paper examines how nonprofit organizations respond to incentives to manage their publicly available financial information. Prior research identifies two operating ratios donors commonly use to evaluate the efficiency and effectiveness of nonprofits (i.e., the program service ratio, defined...

We consider forecast guidance as a mechanism that managers use to avoid negative earnings surprises. Modeling forecast guidance using methods by Matsumoto, [Accounting Review 77 (3) (2002) 483-514] and Bartov et al. [Journal of Accounting and Economics 33 (2) (2002) 173-204], we show that...

The SEC's emphasis on the use of plain English is designed to make disclosures more readable and more informative. Using an experiment, I find that more readable disclosures lead to stronger reactions from small investors, so that changes in valuation judgments are more positive when news is...

This study analyzes whether the tone of financial disclosures affects corporate investments, using texts released by firms that publicly announce restatements of their financial reports. We argue that the tone of restatement texts provides news about restating firms' private information...

This paper examines how the quality of firm information disclosure affects shareholders' use of dividends to mitigate agency problems. Managerial compensation is linked to firm value. However, because the manager and shareholders are asymmetrically informed, the manager can manipulate the firm's...

We document that the quality of public and private information available to investors improves before seasoned equity offerings (SEO) but deteriorates shortly thereafter. As firms improve their financial communication, analyst earnings forecasts become more accurate and less biased. However,...

Financial misrepresentation has usually been analysed by large-scale empirical research. However the generality gained from such an approach is at the cost of understanding the rich and complex nature of financial misrepresentation in real organizations. We adopt a case study approach to gain...

We examine the relation between internal control quality and the accuracy of management guidance. Consistent with managers in firms with ineffective internal controls relying on erroneous internal management reports when forming guidance, we document less accurate guidance among firms reporting...