Sell-side equity analysts often work in hierarchical teams. Lead analysts manage a team of associate and junior analysts, who take part in the team's tasks. We hypothesize a division of labor between lead and associate analysts where lead analysts focus on higher-importance tasks and delegate...

We investigate whether income smoothing affects the usefulness of earnings for contracting through the monitoring role of earnings-based debt covenants. First, we examine initial contract design and predict that income smoothing will increase (decrease) the use of earnings-based covenants if...

We exploit the Fukushima nuclear disaster as a source of variation in the demand for environmental information to study the economic consequences of environmental disclosure. Using a large, hand-collected sample of Japanese firms, we find that firms that issue stand-alone environmental reports...

The notion of a global currency is a debate set aside in the past decade as the abstraction saw little potential for realization in a world with heterogeneous governments unwilling to sacrifice seigniorage for optimal design. The technical capability of creating digital currencies, independent...

This paper presents a new way of measuring residual income, originally introduced by Magni (2000a,b,c, 2001a,b, 2003). Contrary to the standard residual income, the capital charge is equal to the capital lost by investors. The lost capital may be viewed as (a) the foregone capital, (b) the...

I use a sample of 409 companies that restated their earnings from 1997 to 2001 to examine penalties for outside directors, particularly audit committee members, when their companies experience accounting restatements. Penalties from lawsuits and Securities and Exchange Commission (SEC) actions...

In this paper, we examine the monitoring role of government customers in emerging markets, a setting where public procurement is significant but the procurement institutions are weak. In these countries, financial statements certification could be an important mechanism for a private firm to...

Blockchain, the technology behind digital currency, is a decentralized, distributed ledger that records transactions in digital assets. By authenticating and recording immutable transactions, decentralized blockchains perform the same function as many intermediaries in our society that establish...

This paper examines economic consequences of a 2006 Securities and Exchange Commission regulation that mandated public firms to disclose their governance policies on related-party transactions (hereafter RPTs). Employing hand-collected RPT data for S&P 1500 firms, we find that the initiation of...