We use confidential, U.S. Census Bureau, plant-level data to investigate aggregation in external reporting. We compare firms' plant-level data to their published segment reports, conducting our tests by grouping a firm's plants that share the same four-digit SIC code into a “pseudo-segment.”...

For a sample of U.S. firm years spanning the time period 1980 through 1996 we document a positive association between the excess value of diversification as defined by Berger and Ofek [1995] and security analyst ratings of voluntary disclosure as developed by the Association for Investment...

We evaluate the manner in which sponsors of highly leveraged asset-backed commercial paper (ABCP) conduits responded to FASB Interpretation No. 46 (FIN 46), Consolidation of Variable Interest Entities an Interpretation of ARB No. 51, and its Canadian counterpart Accounting Standards Board of...

In this study, we examine managers' decision to report segment-level profit on a before-tax or after-tax basis. A consequence of defining segment-level profit on an after-tax basis internally is that segment-level tax expense must be disclosed in the financial statements. Consistent with the...

We investigate whether characteristics of firms' debt structure, beyond leverage, are associated with predictable variation in conditional conservatism. The contracting theory of conservatism holds that conditional conservatism is an efficient mechanism employed by an organization to address...

We argue that volatility in a manager's disclosure tone across time should be a function of two components: (1) the firm's innate operating risk, and (2) the extent to which the manager's disclosure transparently reflects that risk. Consistent with this argument, we find that both operating risk...

We examine whether earnings announcement textual tone, aggregated across individual publicly traded firms, helps to predict future GDP growth. Prior literature shows changes in aggregate accounting earnings are useful in predicting future economic growth, but only when aggregate earnings changes...

Konchitchki and Patatoukas (2014) (hereafter KP 2014) show that aggregate accounting earnings growth predicts future nominal Gross Domestic Product (GDP) growth and that professional macro forecasters do not fully incorporate the information contained in aggregate accounting earnings. Based on...

Prior research suggests that differences between book and taxable incomes reflect firms' underlying economic fundamentals and their earnings management activities. We investigate the extent to which book-tax differences (BTDs) explain differences in cost of equity capital across firms. Our...