The so-called disclosure principle is a 'puzzle' in the accounting literature: Game theoretic models of financial markets show that in equilibrium firms should disclose all their private information. Yet, the result is not convincing. Researchers have therefore built sophisticated models in...

Voluntary disclosures convey information through two channels: 1) the direct revelation channel in which the disclosed body of information is used to update beliefs, and 2) the signaling channel in which inferences are drawn from the fact that the firm chose what information to disclose. I study...

We examine a duopolistic setting in which firms pre-announce their future competitive decisions (e.g. prices, production quantities, capacity investments) before they actually undertake them. We show that firms overstate their future actions in their pre-announcements, and that their real action...

This study examines the effect of capitalizing acquired in-process research and development (IPR&D) on information asymmetry under Statement of Financial Accounting Standard No. 141 (R). SFAS 141R requires acquirers to fully recognize IPR&D at fair value as an indefinite-lived intangible asset...

The stated goals of the SEC are to protect investors, maintain orderly markets and facilitate capital formation. These goals can be achieved with very light regulation if, as assumed by traditional economic theory, investors process information costlessly and protect themselves from...

Recent empirical and anecdotal evidence suggests that U.S. firms hold a significant amount of cash on their balance sheets. Motivated by this observation, we seek to examine whether a firm's customer base composition, in particular the amount of sales transactions with the U.S. government,...

This paper analyzes empirically the relation between financial analysts' recommendation profitability and their forecast accuracy and shows that contrary to intuition the group of most successful recommendations is not associated with the highest accuracy on average. The finding that best...

This study explored the factors that can influence the timeliness of financial reporting in Nigeria using a sample of 33 financial institutions (2005-2008). The Generalized Least Square (GLS) regression method was used for the estimation and the results reveal that on the average, the sampled...

We examine the relation between firm reputation and the cost of debt financing. We posit that corporate reputation represents “soft information” not captured by balance sheet variables, which is nonetheless valuable to lenders. Using Fortune magazine's survey of company reputation while...

Our study addresses whether integrated report quality, IRQ, is positively associated with greater price informativeness and the extent to which the greater price informativeness is diminished when firms have higher proprietary costs of disclosure. In integrated reports, firms integrate financial...