Skinner (1994) proposes that managers have reputational incentives to preempt negative earnings news and speculates that firms that fail to warn are less likely to be followed by financial analysts. My study formally puts forward this argument and empirically tests the reputational cost of...

This paper uses a new approach to examine whether income smoothing garbles earnings information or improves the informativeness of past and current earnings about future earnings and cash flows. We measure income smoothing by the negative correlation of a firm's change in discretionary accruals...

Prior research finds that firms warning investors of an earnings shortfall experience lower returns than non-warning firms with similar risks and earnings news. Openness thus appears to be penalized by investors. Yet, this finding may be due to a self-selection bias that occurs when firms with a...

We investigate whether the market prices the change in net trading assets as an operating or non-operating activity or some mixture of the two, and whether this market pricing is consistent with the (fundamental) association of the change in net trading assets with future cash flows from...

There are mixed views about whether firm managers voluntarily disclose good news in a more timely fashion than they do bad news. Our study investigates this issue by inferring managers' strategic disclosure behavior from firms' stock returns in the earnings announcement vs. non-announcement...

In recent years, quarterly earnings guidance has been harshly criticized for inducing managerial short-termism and other ills. Managers are, therefore, urged by influential institutions to cease guidance. We examine empirically the causes of such guidance cessation and find that poor operating...