Hedge fund intervention has been associated with many positive corporate changes and is an important vehicle for informed shareholder monitoring. Effective monitoring has also been positively associated with accounting conservatism. Building upon these prior results, we predict an increase in...

Using the staggered adoption of anti-re-characterization laws (ARL) as an exogenous shock to creditor rights, we study the causal effects of creditor rights on borrowers' accounting conservatism. ARL precludes the re-characterization of securitized assets which otherwise can be re-characterized...