Purpose: The authors study how shareholder litigation risk impacts a firm’s decision of real earnings management (REM). This paper aims to shed light on how shareholder litigation risk impacts REM. The authors further explore how the intensifying effect varies systematically conditioning on...

This study examines the impact of the ethnic diversity of executives on real earnings management (REM) using 21,217 firm-year observations for 2,209 U.S. public firms between 1993 and 2020. Social identity theory and top management team research suggest executive diversity enhances mutual...

Purpose The aim of the paper is to investigate the effect of labor strength on stock price crash risk and related moderating mechanisms. Design/methodology/approach To examine the relationship between labor unions and stock price crash risk and, more importantly, whether corporate governance...

Insights on how ordinary, less-sophisticated investors interpret and process management-issued pro forma earnings numbers are useful to regulators because of concerns that pro forma disclosures are misleading to ordinary investors. Two recent experimental studies (Frederickson and Miller, 2004...

In recent years, many companies have emphasized adjusted-GAAP earnings numbers in their quarterly press releases. While managers use different names to describe these non-standard earnings metrics, the financial press frequently refers to them as "pro forma" earnings. Managers and other...

Insights on how ordinary, less-sophisticated investors interpret and process management-issued pro forma earnings numbers are useful to regulators because of concerns that pro forma disclosures are misleading to ordinary investors. Two recent experimental studies (Frederickson and Miller, 2004...

This study provides descriptive evidence on the controversial trend adopted by many firms in recent years of reporting earnings figures on a "pro forma" basis. Pro forma earnings exclude normal income statement items that managers deem to be nonrecurring or nonrepresentative of ongoing...