Objective – This study investigates the effects of financial constraints on the conservatism practices of Brazilian firms.Design/methodology/approach – A sample totaling 1,086 observations of Brazilian publicly traded companies listed on BM&FBovespa was developed from 2000 to 2012. In the...

Management frequently attributes earnings news to various economic events. Using textual analysis, we identify the economic factors underlying earnings news from press releases. We document a wide range of industry-wide shocks and firm-specific actions to which the earnings news in management...

The violation of regulatory targets is potentially costly for banks. To the extent that managers have discretion in setting loan loss provisions, they have strong incentives to use provisioning to manage regulatory capital and thereby reduce the costs of violating regulatory minimum targets....

We study whether bank managers' use their discretion in estimating the allowance for loan losses (ALL) for efficiency or for opportunistic reasons. We do so by examining whether the use of this discretion relates to bank stability and bank risk taking, or whether it relates to earnings...

We provide evidence on the effects of corporate lobbying on earnings management (EM). We argue that corporate lobbying provides firms with some degree of political protection from enforcement of laws and regulations. Thus, lobbying firms face a lower threat of enforcement which in turn reduces...

We examine the relation between passive ownership and financial reporting quality measured by Beneish's (1999) earnings' manipulation score (M-score). We find that passive ownership is negatively related to M-score and to the likelihood of being designated as a “manipulator” firm. However,...

Exploiting the staggered adoption of country-level takeover laws that increased takeover threats, this paper examines whether the resulting increase in CEOs' job security concerns leads to greater earnings management. Using a difference-in-difference design, I find that the enactment of laws...

This study explores a natural experiment that involves the change in the regulation of earnings forecast disclosures from mandatory to voluntary in firms' IPO prospectuses. Findings indicate a behavioural alteration with pessimistic earnings forecasts during the mandatory era turning optimistic...

We develop a model to analyze how board governance affects firms' financial reporting choices, and managers' incentives to manipulate accounting reports. In our setting, ceteris paribus, conservative accounting is desirable because it allows the board of directors to better oversee the firm's...

This study evaluates whether dual holdings report less conservatively than non-dual holdings. We define dual holdings as firms who have at least one shareholder who is a creditor simultaneously and hypothesize that this governance structure mitigates information asymmetries and therefore the...