This study examines whether qualitative disclosure in tax footnotes affects the market valuation of tax avoidance activities. We predict that more disclosures in tax footnotes mitigate investors’ concerns over the agency risk of managers engaging in potentially illegal tax avoidance and...

We analyze whether tough IRS monitoring generates a positive externality by constraining managers' bad news hoarding activities. Supporting this prediction, we find a negative relation between the threat of an IRS audit and stock price crash risk. Our evidence is consistent with recent theory...

We examine the economic benefits of paying dividends. We find that dividend payments mitigate stock price crash risk. In addition, we show that dividend payments reduce bad news hoarding (overinvestment) while bad news hoarding (overinvestment) is positively associated with stock price crash...

Prior research documents that information transmitted via director networks affects firms' policies and real economic activities. We explore whether information flow through director networks influences managers' ability to hoard bad news. We find that the extent of external connections of the...

This study examines whether the term of the auditor-client relationship (i.e., auditor tenure) is associated with future stock price crash risk measured both ex ante and ex post. Using a large sample of U.S. public firms with Big Four auditors, we find robust evidence that auditor tenure is...

We examine the relation between customer concentration, a critically important aspect of a firm's business model, and the level of corporate tax avoidance. A firm with a concentrated corporate customer base needs to hold more cash, faces a higher likelihood of financial distress, has a stronger...

This paper investigates the relation between institutional ownership, financial health, and the market valuation weights on earnings and book value of equity. We find that firms with high levels of institutional ownership are financially healthier, or less financially distressed, than firms with...

We investigate the association between errors in management forecasts of subsequent year earnings and current year accruals. In an uncertain operating environment, managers' assessments of their firms' business prospects are imperfect. Since managers' imperfect business assessments influence...

Landsman and Maydew (2002) document that the information content of earnings announcements has increased over the past three decades, and Francis, Schipper, and Vincent (2002) conclude that expanded concurrent disclosures in firms' earnings announcements, especially the inclusion of detailed...