Showing papers in "Journal of Accounting and Economics in 2011"

TL;DR: In this paper, the authors show that stock prices of firms with gender-diverse boards reflect more firm-specific information after controlling for corporate governance, earnings quality, institutional ownership and acquisition activity.

TL;DR: This paper found that the quality of earnings reported by politically connected firms is significantly poorer than that of similar non-connected companies and that among connected firms, those that have stronger political ties have the poorest accruals quality.

TL;DR: In this paper, the authors examined changes in foreign mutual fund investment in firms following mandatory IFRS adoption in the European Union in 2005, and found that the number of industry peers using the same accounting standards in countries with credible implementation increased.

TL;DR: The authors found that deteriorating earnings quality is associated with higher idiosyncratic return volatility over 1962-2001, and the results are robust to controlling for inter-temporal changes in the disclosure of value-relevant information, sophistication of investors and the possibility that earnings quality can be informative about future cash flows.

TL;DR: In this paper, the authors examined why CFOs become involved in material accounting manipulations and found that while CFO's bear substantial legal costs when involved in accounting manipulation, they have similar equity incentives to the CFO of matched non-manipulation firms.

TL;DR: This article found that firms located closer to the SEC and in areas with greater past SEC enforcement activity, both proxies for firms' information about SEC enforcement, are less likely to restate their financial statements.

TL;DR: In this article, the authors find that over six hundred auditors with fewer than 100 SEC clients exit the market following SOX, and the exiting auditors are lower quality, where quality is measured by: (1) avoidance of AICPA peer reviews and failure to comply with PCAOB rules, and (2) severity of the peer review and inspection reports.

TL;DR: In this paper, the authors exploit variation in the delay in expected loss recognition under the current incurred loss model, and find that reductions in lending during recessionary relative to expansionary periods are lower for banks that delay less.

TL;DR: This paper found that firms with greater transparency (based on accounting standards, auditor choice, earnings management, analyst following and forecast accuracy) experience less liquidity volatility, fewer extreme illiquidity events and lower correlations between firm-level liquidity and both market liquidity and market returns.

TL;DR: In this paper, the authors investigate firms that stop providing earnings guidance either by publicly announcing their decision (announcers) or doing so quietly (quiet stoppers) and find that stoppers have poorer prior performance, more uncertain operating environments, and fewer informed investors.

TL;DR: This paper examined the impact of institutional ownership on financial reporting discretion, focusing on whether the impact varies with institutions' cost of acquiring monitoring information, using geographic distance between the firm and the institutional investor as a proxy for the cost of monitoring information.

TL;DR: In this paper, Beyer et al. review the financial reporting literature related to voluntary and mandatory firm disclosures, and sell-side analyst reports and present alternative ideas about promising avenues for future research.

TL;DR: In this paper, the authors investigate whether information quality affects the cost of equity capital through liquidity risk and find that higher information quality is associated with lower liquidity risk, and that the reduction in cost of capital due to this association is economically significant.

TL;DR: This paper found that borrowers with higher volatility ratios are less likely to have balance-sheet-based covenants, which is consistent with reductions in the contracting usefulness of the balance sheet being associated with reduction in balance sheet covenants.

TL;DR: This article found that firms turn to other benchmark-beating mechanisms, such as real activities manipulation and earnings guidance, in response to the provision of cash flow forecasts, which increases the transparency and the expected costs of accrual manipulations used to manage earnings.

TL;DR: In this paper, the authors show that due to market demand for timely disclosures, most firms maintain the same preliminary earnings release date even though the audit may not be complete as of that date.

TL;DR: This paper found that firms that have consistently met or beaten analysts' expectations provide more frequent "bad news" management forecasts than firms with no established string of MBE, particularly when existing analyst forecasts are optimistic.

TL;DR: The authors examine whether attribution bias leads managers who have experienced short-term forecasting success to become overconfident in their ability to forecast future earnings and examine the effect of this cognitive bias on the managerial credibility.

TL;DR: In this paper, the authors examine how retail store managers reduce their sales activity in response to target ratcheting, and they find that managers with favorable sales performance in the first three months of the year reduce their activity in the final quarter.

TL;DR: In this article, the impact of reconciliation quality on mispricing of pro-forma earnings was investigated. But the authors found no evidence of mis-pricing for firms with high reconciliation quality.

TL;DR: This article found that the expected rates of return and discount rates are downward biased when firms freeze their plans, whereas after SOX the bias is lower, consistent with managers opportunistically biasing pension estimates to obtain labor concessions during periods of reduced regulatory scrutiny.

TL;DR: The authors investigate analysts' use of stock returns and other analysts' forecast revisions in revising their own forecasts after an earnings announcement and find that analysts respond more strongly to these signals when the signals are more informative about future earnings changes.

TL;DR: This paper explore how R&D-related earnings performance and earnings variability depend upon the size of a firm and find that the positive association between the level of future earnings and research intensity increases with firm size.

TL;DR: The authors empirically examine earnout contracts, which provide for contingent payments in acquisition agreements, and reveal considerable heterogeneity in the potential size of the earnout, the performance measure on which the contingent payment is based, the period over which performance is measured, the form of payment for the earn out, and the overall sensitivity of earnout payment to target performance.

TL;DR: The authors investigate reliability differences across recognition and disclosure regimes to shed light on differing incentives and reporting of employee stock option (ESO) fair values, and find that opportunism increases with recognition as compared with disclosure, and that it is associated with incentives to manage earnings.

TL;DR: This paper examined how financial reporting regulations affect, and respond to, macroeconomic cycles by exploring a positive framework in which regulators subject to political pressures respond to cyclical demands by borrowers and lenders.

TL;DR: This paper examined the relationship between bank holdings of mortgage-backed securities (MBS) and MBS prices and measured feedback by the relation between asset returns and the changes in bank MBS holdings.

TL;DR: In this article, the authors highlight the different avenues through which stock liquidity can potentially transcend into accounting research, and further evidence from the recent financial crisis confirms the important role of accounting information during liquidity events.

TL;DR: In this paper, the authors examine stock option volatility estimates disclosed under SFAS 123 and test whether disavowals are informative (opportunistic) by examining whether ex ante firm characteristics, forecast bias, and prediction difficulty are consistent with informative disclosure.

TL;DR: In this paper, the authors evaluate the economic basis of Demerjian's arguments for how debt contracts respond to changes in accounting rules and conclude that there are still some important open issues regarding the economic determinants of debt contracts.