The overall market for derivative securities is often estimated as more than ten times the World's GDP and many decry the complexity of derivatives as a main contributor to the subprime financial crisis. In this paper, we investigate whether and why complexity is used as a proxy for risk when...

Hybrid financial instruments contain features of both liabilities and equity. Standard setters continue to struggle with “getting the classification right” for these complex instruments. In this paper, we experimentally test whether the features of hybrid instruments affect the...

It is mysterious that the same hedge fund may report different performance measures in different places. This paper explores why it is the case. We find that auditing plays an important role in explaining this difference. Due to the private nature, a significant amount of hedge funds are not...

Superannuation (pension, retirement) schemes (plans) are required to report their earnings on a fair-value basis, reflecting recent shifts toward fair-value reporting in financial reporting. Fair-value earnings of such schemes include realized earnings and unrealized changes in values of assets...

I use experimental and survey evidence to investigate how and why audience size affects managers' disclosure content in private meetings with investors. The experiment uses a 2x2 between-subjects design with 328 experienced managers. I predict and find that larger audiences decrease bad news...

Using survey and experimental methods, we provide evidence on the materiality and the nature of information communicated in private meetings from the perspective of professional investors. While the existence of private meeting benefits for investors are well documented, the source of such...

It is increasingly common for individuals to be both investors in, and customers of, a company. Despite its prevalence, we have little understanding of whether these investor-customers’ investment judgments differ from those of investors-only. Using three experiments, we examine how...

Research in financial reporting and accounting standard setting requires an understanding of how measurement and disclosure affect investors’ judgments. This study uses the crypto-asset context to compare investors’ performance and risk judgments under historical cost and fair value...

We examine how investor relations officers (IROs) approach disclosure decisions in private meetings with investors. In these settings, IROs face conflicting pressures to maintain a “level playing field” for all investors while also pleasing preferred investors. We experimentally test how...

This study examines the impact of listing location, whether the stock is listed on the main board or the junior market of the London Stock Exchange, on the number of analysts following the stock. It also examines whether the determinants of analyst coverage can be conditional on listing...