While it is generally maintained that earnings management can occur to inform as well as to mislead, evidence that earnings management informs has been scarce, and evidence that credibility increases with signal costliness inexistent. We provide evidence that firms use discretion over financial...

We examine the economic determinants of short-sale supply, and its consequences for future stock returns. Lendable supply increases with expected borrowing costs and decreases with financial statement constructs that indicate overvaluation. Although rising loan fees help ease supply, we find...

Purpose – The purpose of this paper is to study the relationship between inventory performance, both total inventory (INV) and its discrete components (raw material (RMI), work‐in‐process (WIP), and finished goods (FGI)), and financial performance in manufacturing companies....

Purpose – The purpose of this paper is to examine the link between service specialization and operational performance in hospitals. Existing literature has mostly been concerned with the performance effects of operational focus, which can be seen as an extreme form of specialization. It is not...

We use a unique and confidential database of 15,392 tax audits performed by the Croatian Tax Administration during the 2002–2006 period to examine the impact of task complexity, auditor experience, and auditor effort on audit performance. We provide external validation to prior experimental...

Over the past two decades, control over the US bankruptcy reorganization process has shifted from a debtor's pre-bankruptcy managers to holders of secured claims. The result has been increased adherence to absolute priority and a harder landing for the debtor's managers and shareholders. Because...

Prior research provides mixed evidence on whether the transition to IAS/IFRS deters or contributes to greater earnings management (earnings smoothing). The dominant explanation for the conflicting results is self-selection. Early voluntary adopters had incentives to increase the transparency of...