We examine the economic consequences of the mandatory adoption of IFRS in EU countries by showing which types of economies have the largest reduction in investment-cash flow sensitivity post-IFRS. We also examine whether the reduction in investment-cash flow sensitivity depends on firm size as...

This study explores the market response to achieving analyst earnings expectations, distinguishing between expectations achieved through earnings forecast guidance and earnings management. We consider three earnings management tools: real earnings management, working capital accruals management,...

The paper presents a new methodology for evaluating corporate voluntary disclosures in the annual report discussion section. Based on a new dataset of electronic annual reports and a standard text analysis software package, we text-search a large number of annual reports at minimal (marginal)...

We extend prior research into the association between disclosure quality and share price anticipation of earnings by discriminating between firms that report profits and firms that report losses. As a measure of disclosure quality we count the number of forward-looking profit statements in...

We investigate the joint effects of dividend propensity (i.e. whether a firm pays cash dividends) and voluntary disclosure on the relationship between current stock returns and future earnings. We examine whether dividend propensity and voluntary disclosure act as substitutes or complements in...

We contribute to the earnings management literature and provide insights for accounting regulatorsby investigating the impact of FRS3 on accruals management by UK firms. FRS3 mandated net incomeper share, whilst allowing the release of incremental information on sustainable profitability....

This paper provides new UK evidence on the relationship between managerialincentives and firm risk using a hand-collected database of 3307 executive yearobservations (698 CEO years and 2609 other executive years). We find that therelation between pay performance sensitivity and firm risk...

We examine whether UK firms engage in earnings management or forecast guidance over theperiod 1994−2002 in order to ensure that their reported earnings meet analyst earnings expectations.We explore two earnings management mechanisms: a) the use of positive abnormal working capitalaccruals and...

We explore the capital market consequences of achieving analyst earnings expectations,distinguishing between expectations achieved genuinely or through earnings guidance ormanagement. We examine an inclusive set of earnings management tools: real earningsmanagement, working capital accruals...

We document accounting quality improvements following voluntary IFRS adoption.However, we find no evidence of such improvements subsequent to mandatory adoptionby firms that resist IFRS adoption. We exploit a unique setting in Germany where firmscould voluntarily adopt IFRS before mandatory...