Accounting studies often examine whether the relation between X and Y varies with a moderating variable, M, by including an interactive term, X×M, in a regression. We provide plain-English guidance on why, how, and when to use control variables (Z) in interaction tests. Simple descriptions and...

This paper reviews the literature examining how costs of monitoring for, acquiring, and analyzing firm disclosures – collectively, “disclosure processing costs” – affect investor information choices, trades, and market outcomes. The existence of disclosure processing costs means that...