Business executives and academics frequently criticize budget-based compensation plans as providing incentives for subordinates to build slack into proposed budgets. In this paper, we examine whether either of two practices - using budgets to allocate scarce resources, or providing information...

Aiming to provide a confidence interval of the point estimate of reported accounting performance measures, uncertainty analysis disclosure is usually considered to contain valuable information (IASB, 2010; CFO Forum, 2009), However, little empirical evidence has been documented. As the first to...

This study examines whether firms manage earnings to meet analyst forecasts to signal superior future performance. Prior research finds that firms use earnings management to just meet analyst forecasts and that these firms have a positive association with future performance (Bartov et al.,...

In response to the increasing use of computer programs to process firm disclosures, this registered report develops a new measure of “scriptability” that reflects computerized, rather than human, information processing costs. We validate our measure using SEC filing‐derived data from prior...

This study constructs a novel measure that aims to capture face-to-face private communications between firm managers and sell-side analysts by mapping detailed, large-volume taxi trip records from New York City to the GPS coordinates of companies and brokerages. Consistent with earnings releases...

This study provides evidence on the role of public firms’ financial reports in the state-bond secondary market. I investigate the informational role of corporate earnings announcements and find that public firms’ monthly earnings signals aggregated to the state level are positively...

Corporate spinoffs are important events that are accompanied by valuation and credit-risk implications for the parent firm. Among other benefits, spinoffs can improve corporate focus and enhance valuation transparency. In the debt-contracting context, however, spinoffs can also lead to potential...

The Efficient Market Hypothesis (EMH) assumes each security's price remains at continuous parity with its investment value. Accordingly, EMH denies that analytical trading rules using price or fundamental data result in strategies capable of outperforming market averages on a risk-adjusted basis...

We find that a new compensation disclosure item on expected payouts from performance-based stock grants contains incremental information of a firm's future performance. Firms that disclose the most optimistic expected payment significantly outperform over the next two years, while the least...

Firms have substantial freedom of choice about whether to disclose essential financial statement line items (e.g., total assets) for their business segments. Counting the number of line items that a firm discloses for its segments presents both a simple measure and a new angle for capturing the...