Corporate disclosure is critical for the functioning of an efficient capital market. Firms provide disclosure through regulated financial reports, including the financial statements, footnotes, management discussion and analysis, and other regulatory filings. In addition, some firms engage in voluntary communication, such as management forecasts, analysts? presentations and conference calls, press releases, internet sites, and other corporate reports. Finally, there are disclosures about firms by information intermediaries, such as financial analysts, industry experts, and the financial press.

Information Asymmetry, Corporate Disclosure and the Capital Markets: A Review of the Empirical Disclosure Literature

1. Introduction and Overview. 2. Detecting Influential Observations and Outliers. 3. Detecting and Assessing Collinearity. 4. Applications and Remedies. 5. Research Issues and Directions for Extensions. Bibliography. Author Index. Subject Index.

Regression Diagnostics: Identifying Influential Data and Sources of Collinearity

http://lib.cufe.edu.cn/upload_files/other/4_20140516025625_19.pdf

Information asymmetry, corporate disclosure, and the capital markets: A review of the empirical disclosure literature $

https://www.mit.edu/~kothari/attach/KLW%20paper%20May%202001.pdf

Performance matched discretionary accrual measures

A review is presented of the book “Heuristics and Biases: The Psychology of Intuitive Judgment,” edited by Thomas Gilovich, Dale Griffin, and Daniel Kahneman.

Heuristics and Biases: The Psychology of Intuitive Judgment

https://leeds-faculty.colorado.edu/bhagat/InvestmentOpp-ExecCompensation.pdf

Investment opportunities and the structure of executive compensation

We examine, both theoretically and empirically, top-management compensation in the presence of agency conflicts when shareholders have delegated governance responsibilities to a self-interested Board of Directors (BOD). We develop a theoretical framework that explicitly incorporates the BOD as a strategic player, models the negotiation process between the CEO and the BOD in designing CEO compensation, and considers the impact of potential takeovers by large shareholders monitoring the CEO-BOD negotiations. In equilibrium, internal governance by the BOD and external takeover threats by a large shareholder act as substitutes in imposing managerial control, especially in constraining management's profligacy in awarding equity-based compensation to itself. The model emphasizes factors in the design of compensation contracts that are rarely considered in the literature, such as equity ownership of the largest outside shareholder and the firm's bankruptcy risk. It also provides new perspectives on factors that are often considered in the literature, such as firm size, firm performance, equity ownership of the BOD, and BOD structure. Our empirical tests lend considerable support for our theoretical predictions. Equity ownership of the largest external shareholder, that of the BOD, and the default risk, are strongly negatively related to the size of CEO equity compensation. Consistent with the theoretical model, these factors do not significantly influence the growth of fixed (or non-performance-related) compensation. We also find that the equity ownership of the BOD is more important in managerial compensation control than other BOD related variables, such as BOD size or the proportion of outside directors.

https://www.jstor.org/stable/pdfplus/822545.pdf

Corporate Governance, Takeovers, and Top-Management Compensation: Theory and Evidence

In empirical studies of earnings management (EMI), a central issue is the estimation of the managed component (discretionary accruals) when outsiders observe only the sum of the managed and unmanaged (nondiscretionary) accounting numbers. Important methodological issues arise in part because the variables most useful in predicting the unmanaged components are themselves accounting numbers which are likely to be affected by EM. In this paper, we propose a simple method of addressing some of these issues in testing for EM in context-specific cases.1 Our method builds on the approach used by McNichols and Wilson [1988]. By modeling a specific type of accruals (bad debt expense), they enhance precision but do not capture accrual manipulations in many other accounts. Other studies attempt to capture a larger portion of managed accruals by modeling total accruals. However, we suggest that models following this approach are subject to simultaneity, errors-in-variables,

https://www.jstor.org/stable/pdfplus/2491492.pdf

Issues in Testing Earnings Management and an Instrumental Variable Approach

The effect of accounting procedure changes on CEOs' cash salary and bonus compensation

Existing empirical evidence indicates that analyst forecasts of corporate earnings do not meet the strict rationality standards prescribed by econometric tests of the rational expectations hypothesis.1 In this paper, we address the question of whether the expectation formation process underlying analyst forecasts is adaptive, or whether these forecasts are influenced by noninformational factors, such as incentives arising from the market for their forecasts (O'Brien [1988], Lin and McNichols [1993], Francis and Philbrick [1993], and Dugar and Nathan [1992]), and interaction between judgmental and/or statistical forecasting methods (Bunn and Wright [1991], Fan [1990], and Hoerl and Kennard [1970]). The rejection of rational expectations gives rise to two views of the forecasting process of analysts. The first, based on an informational argument, is that the forecasting process is adaptive (Marcet and Sargent

Sok-Hyon Kang

Papers

Investment opportunities and the structure of executive compensation

Corporate Governance, Takeovers, and Top-Management Compensation: Theory and Evidence

Issues in Testing Earnings Management and an Instrumental Variable Approach

The effect of accounting procedure changes on CEOs' cash salary and bonus compensation

Analysts' Interim Earnings Forecasts: Evidence on the Forecasting Process