We predict and find that regulations expected to harmonize and strengthen firms' financial reporting in the European Union (EU) in the early 2000s increase Tobin's Q ratios of firms with high agency costs due to (a) concentration of control (entrenchment) and (b) an excess of the largest...

We hypothesize and find: (1) Earnings conservatism, the tendency of firms to recognize bad news in earnings on a more timely basis than good news, is substantially greater in portfolios of firms with lower price-to-book ratios than in portfolios of firms with higher price-to-book ratios;(2) The...

We hypothesize and find: (1) Earnings conservatism, the tendency of firms to recognize bad news in earnings on a more timely basis than good news, is substantially greater in portfolios of firms with lower price-to-book ratios than in portfolios of firms with higher price-to-book ratios;(2) The...

Recent studies show that accounting earnings are conservative, i.e., earnings tend to reflect bad news (negative stock returns) on a timelier basis than good news (positive stock returns) (Basu, 1997); moreover, the degree of conservatism is negatively associated with the price-to-book (P/B)...

This paper uses a trading volume analysis to examine the extent to which SEC-mandated disclosures make firms' market risk exposures more transparent to investors. We hypothesize that if the SEC's quantitative market risk disclosures reduce investor disagreements about firms' risk exposures,...

This study explores associations between U.S. firms' 10-K disclosures of market risk exposure, which were newly mandated by a 1997 SEC Release, and stock price sensitivity to underlying risk factors. Firms whose stock prices were more sensitive to oil and gas prices tended to have open year-end...