We examine the influence of the ex ante risk of class action securities litigation on firms' decisions to issue management earnings forecasts as well as the characteristics of those forecasts. We find that litigation risk is positively associated with the likelihood of issuing a forecast for...

We hypothesize that conference calls are voluntary disclosures that lead to long-term reductions in information asymmetry among equity investors. Cross-sectional and time-series tests show that the level of information asymmetry is negatively associated with conference call activity. We find...

This study examines the properties of the R-squared metric frequently used in accounting research as a measure of value relevance. Analytical results show that the metric is unreliable in the presence of scale effects. Specifically, we show that the metric is upwardly biased for accounting...

The 1992 revision of executive compensation disclosure rules in the U.S. could have benefited shareholders by inducing corporate governance improvements or harmed them by increasing disclosure costs. Consistent with the governance improvement hypothesis, companies that lobbied against the...

Three main approaches for examining the effect of accounting information in financial markets have emerged in the last three decades. We formally define information content, valuation relevance, and value relevance. Respectively, these approaches are based on Beaver (1968), Ball and Brown...

The work of Ohlson (1995) and Feltham and Ohlson (1995) had a profound impact on accounting research in the 1990's. In this paper, we first discuss this valuation framework, identify its key features, and put it in the context of prior valuation models. We then review the numerous empirical...

We hypothesize that insiders strategically choose disclosure policies and the timing of their equity trades to maximize trading profits, subject to the litigation costs associated with disclosure and insider trading. Accounting for endogeneity between disclosures and trading, we find that when...