Companies that use their own stock to finance acquisitions have incentives to increase their market values prior to the acquisition. This study examines whether such companies mislead investors by issuing overly optimistic forecasts of future earnings (“deception by commission”) or by...

The scarcity of suitable proxies for asymmetric information has impeded empirical research from providing reliable evidence on whether information risk shapes equity pricing. In re-examining this unresolved question, we rely on firms' geographic distance from financial centers to gauge...

There is tension underlying whether asset redeployability, which refers to the salability of corporate capital assets, shapes crash risk. On one hand, asset redeployability enables managers to opportunistically exploit asset sales to manage earnings upwards to hoard bad news, which, in turn,...

Prior research documents that information transmitted via director networks affects firms' policies and real economic activities. We explore whether information flow through director networks influences managers' ability to hoard bad news. We find that the extent of external connections of the...

We analyze whether tough IRS monitoring generates a positive externality by constraining managers' bad news hoarding activities. Supporting this prediction, we find a negative relation between the threat of an IRS audit and stock price crash risk. Our evidence is consistent with recent theory...