Companies can use either identical or different descriptors to refer to the same item throughout their disclosures, and such descriptors can vary in length. We conduct three experiments in the setting of complex accounting estimate disclosures to examine how descriptor length and descriptor...

Although prior research reports that firms that consistently beat their earnings expectations are rewarded with a market valuation premium, most firms are inconsistent in the signs of their benchmark performance, sometimes missing and sometime beating. In this paper, we report the results of...

This study examines whether senior managers' discretionary accounting and finance choices are selected to influence the business decisions of subordinate managers and employees. We predict these choices are used to address internal management concerns by strategically shaping the information...

Archival research shows that the market reacts to earnings trend as well as to earnings performance relative to analysts' forecasts (i.e., benchmark performance). We conduct four experiments to investigate how and why investors react to these two measures when both are available over multiple...

This paper examines the judgmental effects of the balanced scorecard. The balanced scorecard contains a large number of financial and nonfinancial performance measures divided into four categories. Based on judgment and decision making theory we examine whether the organization of the...

How do investors evaluate managers who choose to use or not use derivatives once the outcomes of those decisions become known? Competing theories make different predictions, and we test these in three experiments. Results show that even when outcomes are held constant, investors are more...

Although information that firms provide about financial instruments and derivatives should help investors judge risk, such information often is not effective for this purpose. We experimentally demonstrate that the labels firms use to describe financial instruments and derivatives cause...