We examine earnings management behavior around SEOs, focusing on both real activities and accrual-based manipulation. Although research has addressed the issues of earnings management around SEOs and earnings management via real activities manipulation, ours is the first paper to put these two...

We examine the relation across firms and industries between the stock market's valuation of Ramp;D expenditures and the fundamental benefits due to, and the risk of, the Ramp;D outlays. We hypothesize and find that the market's valuation of Ramp;D varies across firms and industries, and that it...

We examine how a firm's decision to capitalize vs expense Ramp;D costs affects how the firm manages earnings with Ramp;D. We find that expensers engage in real earnings management, cutting Ramp;D expenditures to meet earnings benchmarks. Capitalizers, however, cut Ramp;D expense to meet...

This study investigates the effect of firms' adoption of SFAS No. 131 segment disclosure rules on the stock market's ability to predict the firms' earnings, as captured by the forward earnings response coefficient (FERC). The FERC is the association between current-year returns and next-year...

We investigate two explanations for the declining contemporaneous linear relation between annual stock returns and accounting earnings over the past 30 years: (1) earnings increasingly reflect news with a lag relative to stock prices and (2) earnings increasingly reflect good and bad news in an...

We compare the accuracy of analyst (I/B/E/S consensus) and earnings-to-price ratio (E/P)-based forecasts of annual earnings across firms. We find that generalizations of Beaver Lambert and Morse's (BLM 1980) E/P-based forecasting model are more accurate than analyst forecasts both for most firms...

We develop and test a model of corporate dividend policy based on the permanent income hypothesis (PIH) of Friedman (1957). The PIH implies that dividends are non-stationary and that the response of dividends to a change in earnings is positively related to the persistence of the change in...

We examine the information benefits of R&D capitalization in the UK after the adoption of IFRS (which mandates capitalization of development costs). Using the successful efforts model of Healy et al (2002), we examine whether information provided by capitalization helps to explain current stock...

We examine how heterogeneity in organizational structure affects private firm earnings quality in the European Union. Organizational structure refers to whether the firm is organized as a single legal entity (standalone) or as a business group: the former are firms not controlling or controlled...