We provide evidence showing that prominent anomalies documented by past accounting research, particularly those attributed to investor biases and lack of sophistication, are limited to small firms which collectively represent a small fraction (typically less than 10%) of the market value of the...

Firms invest non-trivial resources to avoid paying taxes. One of the presumed incentives for doing so is that it should increase the value of the firm. Surprisingly, a large number of studies find that tax expense is positively related to stock returns, suggesting that paying more taxes is good...

The recent influx of foreign companies to the U.S. capital markets via reverse mergers, transactions that bypass the scrutiny given to IPOs, has raised concerns about the quality of financial reporting by the resulting firms. Using an array of proxies for reporting quality, we find that the...

Risk Management Research Report (RMRR) surveys and screens the flow of academic articles on risk management and presents extended scholarly summaries of today's most important scholarly work in a convenient format on a timely basis. Each issue features approximately 15 of the most important...

Past research shows that the outcomes of acquisitions of private firms are better than those of public firms. This finding is commonly explained by the price discount due to illiquidity and the higher information risk involved in acquiring private firms. Existing studies do not separate the two...

We examine whether the codification has achieved some of its goals. We find that the codification is associated with a reduction in the incidence of restatements arising from inadvertent noncompliance, and timelier 10-K filings. These benefits are concentrated in small firms audited by a non-Big...