We compare the valuation accuracy of the equity value estimates inferred from empirical implementations of the abnormal earnings growth model (Ohlson and Juettner-Nauroth 2005; the OJ estimates) with the residual income model (Ohlson 1995; the RIV estimates). We find that the OJ estimates generally...

We confirm the existence of three irregularities noted in prior research related to reported earnings per share (EPS). First, the unusual pattern in the second digit of reported EPS noted by Thomas (1989) that the second digit of EPS is more likely to be zero and five and less likely to be nine...

We analyze the effect of accounting biases on the profits of firms that compete in a Cournot product market. We find accounting biases strictly decrease firms' profits when the firms are fully equity-financed. However, different results emerge when we introduce debt into the firms' financial...

To what degree are audit fees for U.S. firms with publicly traded equity higher than fees for otherwise similar firms with private equity? The answer is potentially important for evaluating regulatory regime design efficiency and for understanding audit demand and production economics. For U.S....

In this paper, we build on a rational expectation model to study the economic consequences of a firm's choice of disclosure audience in a market with heterogenous traders in terms of information processing abilities. Through costly expertise acquisition, some traders become sophisticated and can...

We develop the first general equilibrium exchange economy with risk-averse investors where firm managers can voluntarily make costly, discretionary disclosures regarding the liquidating value of the firm. This extends the discretionary disclosure setting of Verrecchia (1983) by relaxing the...