The cross-sectional approach that is typically used to estimate accrual models implicitly assumes that firms within the same industry have a homogeneous accrual generating process. In this paper, we examine this implicit assumption along three dimensions. First, we argue that the relation...

Recent research results indicate a market premium for firms that met or beat analysts' forecasts. We find evidence consistent with these results. More important, however, we find a market premium for firms that met or beat time-series forecasts, and also the highest market premium for firms that...

In this paper we offer explanations for why firms began voluntarily adopting the expensing provisions of FAS 123 in the second half of 2002. First, we find that firms with greater publicity exposure are more likely to voluntarily expense stock options, controlling for other factors such as the...

Using a unique database of monthly advertising spending in media outlets, we examine whether managers engage in real earnings management to meet quarterly financial reporting benchmarks. We extend prior literature by: (1) separately analyzing advertising activities, allowing us to explore novel...

We examine whether the properties of earnings forecasts – bias and dispersion are different across periods when macroeconomic forecasts are optimistic than non-optimistic, and whether this difference in analyst forecast optimism is stronger during recessionary periods. We find that the...

We empirically investigate valuations of Internet firms at various stages of the initial public offering (IPO) from two perspectives. First, we examine the association between the valuation of Internet IPOs and a set of financial and nonfinancial variables, which prior anecdotal or empirical...

We investigate the market's response to earnings generated from changes in current interest rate swaps. In general, we find that firms experience significantly negative market reactions when using swaps in steep term structure environments to meet expectations. Upon closer inspection we find...

We examine how inventory overproduction among high fixed costs firms affects these firms' contemporaneous and future accounting performance, and how financial analysts and the stock market incorporate implications of these relations in their reactions. We find that higher fixed costs firms...

We examine empirically whether the use of the partial method for deferred taxes provides incremental information of use to investors. Specifically, we test whether U.K. capital markets valued unrecognized deferred tax amounts reported in the footnotes to U.K. annual reports, pursuant to U.K....

Recent work in management accounting offers several novel insights into firms’ cost behavior. This study explores whether financial analysts appropriately incorporate information on two types of cost behavior in predicting earnings - cost variability and cost stickiness. Since analysts’...