This paper provides evidence on the characteristics of firms that include pro forma earnings information in their press releases, whether the usefulness of pro forma earnings to investors varies systematically with these characteristics, and whether the investor response to pro forma earnings is...

This study presents empirical evidence on the ex post costs of employee stock option (ESO) grants to issuing firms and examines whether the Black-Scholes [1973] model provides reasonable estimates of these values. Because there are no market prices for ESOs, the traditional avenues for testing...

We empirically examine the effects of intensified scrutiny over non-GAAP reporting on the quality of non-GAAP earnings exclusions. We find that, on average, exclusions are of higher quality (i.e., more transitory) following intervention by the Securities and Exchange Commission (SEC) into...

This paper examines accounting and non-accounting factors behind accounting losses over a fifty-year period. Using multivariate time-series analysis, we report evidence that the annual percentage of losses for U.S. firms is significantly related to accounting conservatism, Compustat coverage of...

This paper provides evidence on the characteristics of firms that include pro forma earnings information in their press releases and on whether the usefulness of pro forma earnings to investors varies systematically with these characteristics. Using a sample of 249 press releases from 1997-99,...

This paper examines accounting and non-accounting factors behind accounting losses over a fifty-year period. Using multivariate time-series analysis, we report evidence that the annual percentage of losses for U.S. firms is significantly related to accounting conservatism, Compustat coverage of...

We examine whether short-term financial reporting objectives related to executive compensation and employment horizons affect managers' decisions to undertake accelerated share repurchases (ASRs) versus open market repurchases (OMRs). In an ASR, the firm repurchases borrowed shares and...

We examine the role of target firms' accounting quality in the merger and acquisition (M&A) process. We predict that target firm accounting quality will be positively associated with (1) the likelihood that the deal will be structured as a negotiation rather than as an auction; (2) the speed...

Survey evidence reveals that managers prefer to avoid dilution of earnings per share (EPS), though financial theory suggests it is irrelevant in firm valuation. We explore contracting and behavioral explanations for this apparent paradox using a large sample of debt-equity issuers. We first...

Recent research shows that matching between contemporaneous revenues and expenses has declined over the past 40 years. We argue that this decline in matching reduces the contracting usefulness of earnings and affects managerial effort allocation and performance measure choice. Based on a...