We examine the role of reported accounting information (e.g., earnings and book values) relative to analysts' earnings forecasts to determine what information is most relevant for explaining market value conditional on a firm's life cycle stage. Using the life cycle measure developed in...

Strategy theory suggests that firms can impede mean reversion of economic rents by employing competitive efforts, thereby impacting profitability, forecasting, and valuation. We use realized operating performance to establish which competitive effort proxies effectively protect rents. The...

The economics and management literature provides theoretical support for both leader and laggard firms to earn higher future operating returns. However, prior empirical research lacks a generalizable proxy to capture leader vs. laggard behavior, thus limiting prior findings to specific contexts....

This paper examines the association between ineffective internal control over financial reporting and the profitability of insider trading. We predict and find that the profitability of insider trading is significantly greater in firms disclosing material weaknesses in internal control relative...

This study investigates the role of financial reporting quality in merger and acquisition (M&A) deals that are ultimately terminated, i.e., go bust. If a target is a U.S. publicly-traded company, an acquirer's initial assessment of the potential benefits associated with the acquisition of the...

CEOs completing M&A transactions face pressure to deliver returns and investors sometimes express concern that financial disclosures fail to provide information necessary to evaluate post-acquisition performance. Regulators require that auditors provide Key Audit Matter (KAM) disclosures, which...

Most prior studies model tax avoidance as a function of firm-level characteristics and do not consider how individual executive characteristics affect tax avoidance. This paper investigates whether executives with superior ability to efficiently manage corporate resources engage in greater tax...

Motivated by investor criticisms of current accounting for business combinations, this study investigates whether differences exist in how acquisition date fair values of identifiable intangible assets relate to investors' expectations about the entity's future cash flow prospects. Some...

In this study, we investigate what makes up acquired goodwill and find that it consists of at least three distinct components: expected synergies from combining the assets of the target and acquirer, the going concern value of the target firm, and overpayment. We identify these components...

Under U.S. GAAP, firms recognize assets acquired in business combinations at fair value. Similarly, in taxable asset acquisitions firms adjust the tax basis of assets to fair value. Managers can increase the present value of future tax savings by allocating a greater portion of the purchase...