The term “financial psychopath” was coined after the financial crisis of 2007−2008. Intended as a term of derision, the media used it to negatively label financial professionals, rather than to draw a clinical profile. The expression succinctly conveys the widespread post−2008 public...

Financial analysts are important players in the marketplace. Analysts' reports, which include forecasts of earnings and stock recommendations, move market prices. Investors, both large and small, rely on the information in reports when forming their investment decisions. Given the relevance of...

An increasing number of households use financial planners or advisors. This chapter provides insight into these professionals, their potential motivations, and their interactions with clients. The various regulatory regimes of financial planners and advisors are discussed, including the most...

This chapter assesses the behavior of corporate managers and boards of directors within the framework of agency theory, stewardship theory, and psychological biases. In agency theory, a chief executive officer (CEO) is motivated to act in his or her own best interests rather than those of...

A large body of behavioral finance literature focuses on the behavioral biases of individual investors in their trading choices. The research shows that sophistication is related to the level at which these behavioral biases influence investors' trading choices. This chapter reviews the...

This chapter discusses the role of speculation in the financial markets that influences individual and group behavior in the form of bubbles and crashes. The chapter highlights behavioral finance issues associated with bubbles, such as overconfidence, herding, group polarization, group-think...

This chapter provides an overview of the emerging cognitive and emotional themes of behavioral finance that influence individual behavior. The behavioral finance perspective of risk incorporates both qualitative (subjective) and quantitative (objective) aspects of the decision-making process. An...

Financial and investment professionals along with their clients reveal a wide array of psychological biases that can result in flawed judgments and decisions. Understanding these biases is important for these professionals to ensure their clients are receiving the best advice and information....

We investigate the role of accounting and audit quality in the allocation of international development aid loans provided by the World Bank. This aid is crucial to improve governance functions, infrastructure, and capital markets, and the accounting and audit environments in a country can...

The paper reviews the purpose, structure, and historical development of a conceptual framework for financial reporting. It then demonstrates the deduction of integrated measurement and presentation principles from a proposed underlying structure comprised of the objective of financial reporting...