This paper examines whether firms that deviate from an empirically modeled ("expected") credit rating engage in earnings management activities, as measured by abnormal accruals and real activities earnings management. We then test whether such actions are successful in helping these firms move...

We use a dataset of sell-side analysts' scenario-based valuation estimates to examine whether analysts reliably assess the risk surrounding a firm's fundamental value. We find that the spread in analysts' state-contingent valuations captures the riskiness of operations and predicts the absolute...

During recent years heightened standards for board audit committee membership has been imposed by the SEC, NYSE and others. Sarbanes-Oxley requires that the Audit Committee will be comprised solely of independent directors, and that the company must disclose whether at least one of the members...

Can managers influence the liquidity of their firms' shares? We use plausibly exogenous variation in the supply of public information to show that firms actively shape their information environments by voluntarily disclosing more information than regulations mandate and that such efforts improve...

In this paper we analyze the impact of consistency upon the accuracy of corporate values estimates provided by multiple-based valuation methods. Based on a sample with more than 6,000 firm years from German firms we find consistent multiple definitions generally to outperform inconsistent ones....

I study the relation between venture capitalists' (VCs) presence and real activities manipulation (RM). I find that compared to non-venture-backed companies, venture-backed companies show significantly less RM in the first post-IPO fiscal year. The results are robust after controlling for the VC...

How do analysts develop their forecasts? In this paper, we analyze how sell-side analysts estimate target prices and show that they consistently employ subjective adjustments to baseline models. For a panel of analyst reports, we show that target price forecasts that deviate significantly from...

We examine accounting standard ASR 118 mandating the reporting of fair values of investment securities. Using a unique setting, the USA public venture capital (VC) industry, we test whether ASR 118 would be important to investors, or whether relevance would come at the expense of reliability. We...

This study examines the relationship between the value of financial analysts' recommendations and the intensity of firms' research and development (R&D) expenditures. We conduct univariate, portfolio and regression analyses using a sample of 8,620 public firms for the period 1993-2004. The...

This study examines the determinants of financial analyst coverage in the business press and the effects of such coverage on analysts' careers. Using a sample of business press articles that quote a financial analyst, we compare each cited analyst with the other analysts who were actively...