Numerous accounting studies claim that investors fail to rationally price accrual-related information and that investors are functionally fixated. This study documents the importance of performing robustness tests when testing economic or behavioral explanations for apparent accounting-related...

Accounting studies routinely encounter observations taking on extreme values. Such observations can influence statistical estimates (coefficient) and inferences. Our survey of the accounting literature documents that the two most common approaches used to address influential observations are...

Prior research shows that extant discretionary accrual models are misspecified when applied to firms with extreme performance. Nonetheless, use of such models in tests of earnings management and market efficiency is commonplace in the literature. We examine the specification and power of the...

Numerous accounting studies conduct tests of the market pricing of accounting information. The purpose of this study is to both highlight and quantify the consequences of using of ex-post information to form trading strategies based on accounting numbers and to document the importance of...

Prior research shows extant discretionary accrual models are misspecified when applied to firms with unusual performance. Nonetheless, research on earnings management and market efficiency frequently uses these models. We examine the specification and power of tests based on performance-matched...