Demerjian, Lev, and McVay (2012) (DLM) provide a conceptual framework for the measurement of managerial ability using data envelopment analysis (DEA). We show that the DLM method provides a consistent estimator of managerial ability. The DLM approach to measuring managerial ability begins with...

We analyze p-values in empirical papers published in the “top three” accounting journals in 2011. We estimate average Type I error and Type II error rates to be 11% and 22% respectively. The p-value distribution is strongly concentrated near zero and the frequencies of p-values just below...

We examine whether forecasters of earnings can be “nudged” into changing their forecasting behavior without altering their economic incentives or limiting their choices. We use a natural experiment on Estimize.com to quantify the effects of a nudge promoting a social norm of exerting one’s...

Accounting plays a strategic role when accounting-based measures are used to set, communicate and execute strategy. In this paper, we describe and test a strategic role of accounting in the dynamic context of cyclical industries. Specifically, we examine how a strategic emphasis on balance sheet...

We investigate how the arrival of Estimize, a provider of crowdsourced earnings forecasts, impacts IBES analysts' forecast timeliness and facilitates market efficiency. We find that IBES analysts become more responsive to earnings announcements and start issuing their quarterly forecasts earlier...

Production backlog (a.k.a. order backlog) is an important non-GAAP metric that is a leading indicator of future firm performance. We explore how various factors interacted with production backlog leads to potentially unexpected relationships in predicting future earnings. This paper documents...