Purpose: This paper analyses what factors drive a company's decision to align financial and management accounting policies as a measure of integration of management accounting and financial accounting at the highest hierarchy levels of a company. Design/methodology/approach: Research hypotheses...

We investigate the relationship between cost stickiness and management earnings forecasts. Prior research suggests that earnings are more volatile for sticky cost firms resulting in greater earnings forecast errors. The greater forecast errors might increase investors' demand for information and...

This paper investigates the association between the characteristics of business entities, corporate governance, and practices of risk disclosure. Notably, the objective of this paper is to examine the impact of the characteristics of business entities and corporate governance on risk disclosure...

Do firms provide informative disclosures in an environment of extreme uncertainty? We study this research question by examining corporate disclosures during the initial stage of the COVID-19 pandemic, i.e., the first quarter of 2020. During this period, firms had to respond to an unprecedented...

We find that a new compensation disclosure item on expected payouts from performance-based stock grants contains incremental information of a firm's future performance. Firms that disclose the most optimistic expected payment significantly outperform over the next two years, while the least...

We introduce and apply machine transfer learning methods to analyze accounting disclosures. We use the examples of the new BERT language model and sentiment analysis of quarterly earnings disclosures to demonstrate the key transfer learning concepts of: (i) pre-training on generic “Big...

We use highly granular computational linguistics to assess the MD&A section of the 10-K as a whole. Our results show that the content of MD&A can be systematically used to explain the valuation of firms, particularly those undergoing business change, where the value relevance of financial...

This paper examines the implications of the option value of equity for firms' disclosures. Merton (1974) shows that the equity of levered firms is equivalent to a call option whose value increases in the expected variance of future cash flows. I use this equivalence to calculate firms' vega,...

I study the effect of the implementation of the SEC's EDGAR system on two unique forms of information asymmetry: (1) asymmetry between managers and investors, and (2) asymmetry among different groups of investors. Information asymmetry theory suggests that firms' adoption of the EDGAR system can...

In this paper, I examine the relation between disclosure commitment and cost of equity capital using accelerated earnings announcement disclosures as a measure of commitment. In settings characterized by imperfect market competition, I find that firms which consistently disclose balance sheet...