This paper examines whether credit rating agencies fully understand the implications of earnings and its components for future performance. After establishing that earnings are more relevant to the rating process than cash flows, we find that future rating changes can be predicted using current...

We find that financial statement comparability enhances the ability of current period returns to reflect future earnings, as measured by the future earnings response coefficient (FERC). Thus, comparability improves the informativeness of stock prices and allows investors to better anticipate...

This paper examines the role of financial statement comparability in shaping trading volume prior to earnings announcements. We find that the degree of delayed trading volume prior to earnings announcements is less pronounced for firms with more comparable financial statements. In addition, the...