This paper examines whether managers signal firms' future performance by managing earnings to exceed thresholds. Because managers' reporting discretion is bounded by the accounting regulations, managing earnings to exceed the current period's thresholds reduces future earnings, making future...

Purpose — The study on the relationship between accounting conservatism and earnings quality is not new. However, the results are inconsistent and mixed, and to some degree, even contradictory, which represents a gap in the literature. The purpose of this study is to provide some explanations...

We find that firms that meet or just beat last’s year earnings (henceforth, MBE firms) have a lower post-filing stock return volatility in the month following the 10-K filing. We also find that this negative relation is stronger for the MBE firms providing more readable 10-K. Furthermore, we...