This paper examines the cross-sectional relation between leverage and future stock returns. Prior research documents a puzzling negative correlation. We show that it is largely caused by firms' use of internal financing when having significant off-balance-sheet operating assets due to...

Using a unique data set on audits of Chinese companies, this paper examines the Big N audit quality effect by comparing the audit processes of Big N and non-Big N auditors. We document that Big N audits involve significantly more audit hours with higher per-hour fees but do not result in more...

This paper studies the accounting treatment of uncertainty and how it affects a firm's capital structure. We distinguish two sources of uncertainty that raise reliability concerns: inherent uncertainty and incentive uncertainty. By inherent uncertainty, we refer to uncertainty about the quality...

This study demonstrates that stocks with low book-to-market ratios, also known as glamour stocks, have significantly more positive skewness in their return distributions compared to the return distributions of value stocks with high book-tomarket ratios. The premium (discount) investors apply to...

This study tests and finds that stock prices around earnings announcements reflect investor aversion to negative news. We find that when forecasts are negatively skewed, indicating considerable downside risk, earnings announcement returns are eventually more positive. Announcement returns are...

Trading outside the main session occurs between 4:00PM-8:00PM and 4:00AM-9:30AM and is typically dominated by institutional investors, as retail investors are discouraged to trade in the extended trading hours. This study examines whether trading in the extended hours is predictive of future...

As new information technology (IT) platforms continue to emerge, the technical project risk associated with developing IT projects for these platforms is particularly challenging for organizations. We develop a nomological network of people, process, and technology to gain insight into how the...

This paper examines the relation between information's properties, such as reliability and relevance, and public disclosure policy. It shows that the optimal accounting system often involves a carefully balanced combination of mandatory and voluntary disclosure, with mandatory reporting focused...

Earnings announcements and 10-K filings are two important channels through which companies release financial information to the public. Earnings announcements, particularly for large firms, are often accompanied by intensive media coverage. In contrast, 10-K filings are usually of much lower...

This paper examines the selective trading of available-for-sale (AFS) securities by U.S. banks after the implementation of fair value accounting under Statement of Financial Accounting Standards No. 115, Accounting Standards Codification (ASC) Topic 320. Our findings suggest firms still engage...