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作者：Gaver, JJ; Paterson, JS
作者单位：University System of Georgia; University of Georgia; State University System of Florida; Florida State University
摘要：We report that insurance firms manage loss reserves to avoid violating certain test ratio bounds (known as IRIS ratios) that are used by regulators for solvency assessment. In our sample, almost two-thirds of the firms that would violate four or more IRIS ratios successfully adjust reserves to reduce the reported number of violations to less than four. This finding is significant because four violations usually trigger regulatory intervention. Our results indicate that non-earnings goals are a...
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作者：Black, EL; Carnes, TA; Mosebach, M; Moyer, SE
作者单位：University of Arkansas System; University of Arkansas Fayetteville; Brigham Young University; University of North Carolina; Western Carolina University
摘要：Both debt covenants and federal monitoring restrict banks' discretion. We examine whether banks substituted monitoring for covenants by investigating debt issues of 105 banks between 1979 and 1984, a period when monitoring increased. We hypothesize that bank shareholders take advantage of the intersection between debt covenants and regulatory monitoring to reduce agency costs. We find a decrease in the number of debt issues containing such covenants and the total debt subject to such covenants...
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作者：Taffler, RJ; Lu, J; Kausar, A
作者单位：Cranfield University
摘要：We investigate the stock price reaction to UK going-concern audit report disclosures in the calendar year subsequent to publication. Over this period our firm population underperforms by between 24% and 31% depending on the benchmark adopted. This market underreaction to such an unambiguous bad news release is not a post-earnings announcement drift phenomenon; it is also robust to other potentially confounding explanations. However, whatever the reasons for such stock mispricing, we find costl...
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作者：Carter, ME; Lynch, LJ
作者单位：University of Pennsylvania; University of Virginia
摘要：We examine whether repricing underwater stock options reduces executive and overall employee turnover using a sample of firms that reprice stock options in 1998 and a sample of firms with underwater stock options that choose not to reprice. We find little evidence that repricing affects executive turnover. However, using forfeited stock options to proxy for overall employee turnover, we find that 1999 employee turnover is negatively related to the 1998 repricing, suggesting that repricing help...
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作者：Daniel, K
作者单位：Northwestern University
摘要：Chan, Frankel, and Kothari (CFK) present new empirical evidence which they argue rules out a broad class of behavioral models as potentials explanations of long-horizon return predictability. I provide a different interpretation of their findings. The CFK evidence and other extant empirical evidence is inconsistent with investor misinterpretation of earnings information as a source a long-horizon predictability, as CFK claim. However, this evidence points to misinterpretation of non-accounting...
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作者：Butler, M; Leone, AJ; Willenborg, M
作者单位：University of Rochester; University of Connecticut
摘要：In this paper, we use a web-based sampling methodology to obtain and content analyze a large sample of modified audit opinions. Based on this analysis, we re-examine whether certain modified audit opinions are associated with abnormal accruals. We find that the documented relation between modified opinions and abnormal accruals rests with companies that have going-concern opinions. These firms have large negative accruals that are likely due to severe financial distress. Overall, we find no ev...
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作者：Gu, ZY; Chen, T
作者单位：Carnegie Mellon University
摘要：Given the recent controversy over deviations of street earnings from GAAP earnings, we show that the nonrecurring items that analysts include in street earnings are more persistent and have higher valuation multiples than those items they exclude from street earnings. in addition, we find no evidence that the pricing differential between the included and excluded items leads to future abnormal returns. If, as analysts claim, the primary use of street earnings is to value a stock, then our resu...
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作者：Basu, S; Markov, S
作者单位：Emory University
摘要：Prior research concludes that financial analysts do not process public information efficiently in generating their earnings forecasts. The ordinary least squares (OLS) regression-based tests used in prior studies assume implicitly that analysts face a quadratic loss function. In contrast, we argue that analysts likely face a linear loss function, and hence, try to minimize their absolute forecast errors. We conduct and compare rational expectations tests using these two alternative loss functi...
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作者：Leftwich, R
作者单位：University of Chicago
摘要：Barton and Waymire (J. Account. Fcon. (this issue)) investigate voluntary accounting disclosure practices in the 1920s. They conclude that managers' incentives explain, in part, cross-sectional reporting differences. Moreover, the authors conclude that firms with higher quality financial reporting experienced substantially lower price declines when stock prices dropped so dramatically in October 1929. Their first finding seems incontrovertible, albeit less surprising. Their second finding is m...
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作者：Palmrose, ZV; Richardson, VJ; Scholz, S
作者单位：University of Kansas; University of Southern California
摘要：We examine the market reaction to a sample of 403 restatements announced from 1995 to 1999. We document an average abnormal return of about -9 percent over a 2-day announcement window. We find that more negative returns are associated with restatements involving fraud, affecting more accounts, decreasing reported income and attributed to auditors or management (but not the Securities and Exchange Commission). There appears to be an additional penalty for announcements that do not quantify the ...
