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作者：Nallareddy, Suresh; Sethuraman, Mani; Venkatachalam, Mohan
作者单位：Duke University; Cornell University
摘要：This paper reconciles conflicting evidence in prior literature on the relative ability of earnings and cash flows in predicting future cash flows. Further, we investigate the implications of temporal shifts in accrual properties and operating environment for cash flow predictability. Three key insights emerge. First, cash flows consistently outperform earnings in predicting future cash flows. Second, accruals and its components, including those capturing non-articulating events, have increment...
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作者：Sutherland, Andrew G.
作者单位：Massachusetts Institute of Technology (MIT)
摘要：Costello, Down, and Mehta (2020) trace their slider intervention to deviations from the credit line amount recommended by a credit scoring model. The deviations are followed by larger delinquency declines and bigger sales orders, and Costello et al. interpret these results using discretion-based theories. However, incremental deviations are concentrated on newer clients rather than those the lender has accumulated soft information about. Deviations also appear larger for public than private bo...
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作者：Hsieh, Tien-Shih; Kim, Jeong-Bon; Wang, Ray R.; Wang, Zhihong
作者单位：University of Massachusetts System; University Massachusetts Dartmouth; City University of Hong Kong; Hong Kong Baptist University; Clark University
摘要：Psychology and neuroscience studies document that facial trustworthiness perceptions may affect observers' decision-making process. Our study examines whether auditors' perceptions of client executives' facial trustworthiness are associated with their audit fee decisions. We employ a machine-learning-based face-detection algorithm to measure executives' facial trustworthiness. We find that auditors charge 5.6% less audit fee to firms with trustworthy-looking CFOs than to those with untrustwort...
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作者：Kim, Yongtae; Su, Lixin (Nancy); Zhou, Gaoguang (Stephen); Zhu, Xindong (Kevin)
作者单位：Santa Clara University; Korea Advanced Institute of Science & Technology (KAIST); Lingnan University; Hong Kong Baptist University; City University of Hong Kong
摘要：This study examines how PCAOB international inspections of non-U.S. auditors affect international Merger and Acquisition (M&A) outcomes. We find that clients of inspected auditors are more likely to become acquisition targets after the public disclosure of auditor's inspection report. We also find that deal completion is more likely and deal announcement returns are higher if deals involve targets with auditors for which inspection reports are available. Engagement deficiencies and unremediate...
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作者：Engelberg, Joseph; McLean, R. David; Pontiff, Jeffrey
作者单位：University of California System; University of California San Diego; Georgetown University; Boston College
摘要：Analysts' price targets and recommendations contradict stock return anomaly variables. Using an index based on 125 anomalies, we find that analysts' annual stock return forecasts are 11% higher for anomaly-shorts than for anomaly-longs. Anomaly-shorts' return forecasts are excessively optimistic, exceeding realized returns by 34%. Recommendations also tend to be more favorable for anomaly-shorts, although this result varies across anomaly types. Consistent with analysts' slowly incorporating a...
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作者：Laurion, Henry
作者单位：University of Colorado System; University of Colorado Boulder
摘要：Managers almost always define non-GAAP earnings to exclude the effects of acquisition and restructuring expenses, the amortization of intangibles, and impairments. I find that managers with a history of reporting non-GAAP earnings act as if they place lower weight on these excluded expenses when making real activities and accounting choices. They pursue more and larger acquisitions, have higher total capital investment, are more likely to restructure, and are more likely to recognize discretio...
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作者：Gao, Pingyang; Jiang, Xu
作者单位：University of Chicago; Duke University
摘要：Discrete recognition is a long-standing and ubiquitous accounting practice, but it has been widely criticized for suppressing information and inducing accounting-motivated transactions. We study a model to examine the economic consequences of shifting away from discrete recognition to a continuous measurement approach. Without manipulation, discrete recognition is less informative than the continuous approach. However, the continuous regime induces more manipulation. The equilibrium informativ...
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作者：Friedman, Henry L.; Hughes, John S.; Michaeli, Beatrice
作者单位：University of California System; University of California Los Angeles
摘要：We study how the potential for discretionary disclosure affects the way a firm designs its reporting system. In our model, the firm's primary but nonexclusive concern is to induce beliefs that exceed a threshold. Such thresholds arise in numerous contexts, including investing decisions, liquidation/continuation choices, covenants, audits, impairments, listing requirements, index inclusion, credit ratings, analyst recommendations, and stress tests. The optimal reporting system is characterized ...
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作者：Holthausen, Robert W.; Core, John E.; Hanlon, Michelle; Guay, Wayne; Wu, Joanna; Lang, Mark
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作者：Larcker, David F.; Watts, Edward M.
作者单位：Stanford University; Stanford University
摘要：In this study, we investigate whether investors are willing to trade off wealth for societal benefits. We take advantage of unique institutional features of the municipal securities market to provide insight into this question. Since 2013, states and other governmental entities have issued over $23 billion of green bonds to fund eco-friendly projects. Comparing green securities to nearly identical securities issued for non-green purposes by the same issuers on the same day, we observe economic...
