A firm meets or beats expectations when it reports earnings that are at or above the consensus analysts' forecast. We argue that two types of firms MBE: strong firms who commit to future performance and signal future earnings by MBE, and weak firms who attempt to mimic strong firms by managing...

The paper discusses the economic impact of legal, corporate governance, tax, disclosure, and incentive issues arising from revelation of dating games with regard to executive option grant dates. It provides an estimate of the value loss incurred by shareholders of firms implicated in backdating...

The metrics of generally accepted accounting principles is undergoing a debate in the wake of the accounting and financial scandals that began with Enron. Central to this debate is whether GAAP has become too rule based and needs to become more focused on principles. Sarbanes-Oxley calls on the...

Asymmetric information and mechanisms for its resolution in the initial public offering (IPO) process are subjects of extensive research and debate. In this paper, we investigate the impact of one such mechanism, namely voluntary disclosure of management earnings forecasts by issuers of IPOs, as...

Prior research on the cross-country variation of accounting choices induced by managerial incentives to extract private benefits is limited in its use of accounting measures that have limited empirical correlations with direct estimates of private control benefits. This study attempts to resolve...

This Article analyzes an important form of stealth compensation provided to managers of public companies. We show how boards have been able to camouflage large amounts of executive compensation through the use of retirement benefits and payments. Our study illustrates the significant role that...

The Sarbanes-Oxley Act (SOX) mandates management evaluation and independent audits of internal control effectiveness. The mandate is costly to firms but may yield benefits through lower information risk that translates into lower cost of equity. We use unaudited pre-SOX 404 disclosures and SOX...

The main objectives of the Sarbanes-Oxley Act of 2002 are to improve the accuracy and reliability of corporate disclosure. Under Section 404 of SOX, an auditor has to report an assessment of a firm's internal controls and attest to management's assessment of the firm's internal control. Material...

Price discovery is the process whereby value-relevant, private information becomes impounded or reflected in a stock's publicly-observable market price. The timeliness of price discovery refers to how quickly that process takes effect.There is no reason to believe either that all private...

Due to ever-increasing demands on the corporate reporting supply chain (i.e., regulators, lender, investors, etc.), there is an urgent need to eliminate the labor-intensive processes currently used to produce business reports. Monumental sums of money, time, and other resources are being wasted...