-
作者：Gong, James Jianxin; Young, S. Mark; Zhou, Aner
作者单位：California State University System; California State University Fullerton; University of Southern California; California State University System; San Diego State University
摘要：Prior studies on real earnings management (REM) focus mainly on estimating abnormal operating and investing activities at the firm level. We extend this literature by providing micro-level evidence regarding how financial reporting pressures influence new product release decisions, or product-level REM. Specifically, we compare how public and private studios differentially time the release of their movies. We find that, faced with pressure to boost quarterly revenues and earnings, public studi...
-
作者：Fox, Zackery D.; Wilson, Ryan
作者单位：Texas A&M University System; Texas A&M University College Station; Mays Business School; University of Oregon
摘要：We examine whether the Internal Revenue Service (IRS) uses public information to obtain qualitative signals regarding the quality of firms' financial information or management integrity. Using the procurement of public information as a proxy for IRS attention, we test whether public signals of poor information quality (restatements) lead to an increase in IRS attention. To begin, we document that the IRS is both more likely and quicker to acquire public filings announcing a restatement than an...
-
作者：Hall, Curtis; Judd, J. Scott; Sunder, Jayanthi
作者单位：Drexel University; University of Illinois System; University of Illinois Chicago; University of Illinois Chicago Hospital; University of Arizona
摘要：Auditors tend to be more conservative in their audits when they face greater litigation risk. However, it is unclear whether this conservatism is always desirable or whether it can be excessive. To evaluate the usefulness of greater auditor conservatism, we examine whether auditor conservatism improves audit quality and imposes real operating consequences for clients. We examine auditor behavior in a sample of auditors' client banks, when one of the auditor's other client banks fails (as deeme...
-
作者：Allen, Eric J.; Allen, Jeffrey C.; Raghavan, Sharat; Solomon, David H.
作者单位：University of California System; University of California Riverside; University of California System; University of California Riverside; University Redlands; University of California System; University of California Berkeley; Boston College
摘要：We examine the choice of organizational structure for VC-backed startup firms. These firms overwhelmingly organize as C-corporations rather than as tax advantaged limited liability companies (LLCs). This results in foregone tax savings of $43.9 billion, or 4.9% of the total equity invested in the sample firms. The decision is puzzling, given plausible estimates of the direct costs involved, but appears related to hassle and other transition costs generated by participants implementing a new fo...
-
作者：Su, Barbara
作者单位：Pennsylvania Commonwealth System of Higher Education (PCSHE); Temple University
摘要：This paper studies whether banking practices affect borrowing firms' financial reporting quality. Specifically, I examine the effect of bank cross-selling activities (i.e., a bank's joint provisions of lending and underwriting services to the same firm) on borrowers' financial reporting quality for debt contracting purposes. Compared to issuing stand-alone loans, cross-selling increases a bank's risk exposure to the firm and therefore gives the bank more motivation to monitor the borrower's fi...
-
作者：Mauritz, Christoph; Nienhaus, Martin; Oehler, Christopher
作者单位：University of Munster; Goethe University Frankfurt
摘要：We analyze the extent to which individual audit partners influence the audited narrative disclosures in their clients' financial reports. Using a sample of 3,281,423 private and public client firm-pairs, we find that the similarity among audited narrative disclosures is higher when two client firms share the same audit partner. Specifically, we find that the wording similarity of management reports (notes) increases by 30 (48) percent, the content similarity by 29 (49) percent, and the structu...
-
作者：Lin, Wen; Panaretou, Argyro; Pawlina, Grzegorz; Shakespeare, Catherine
作者单位：Central University of Finance & Economics; Lancaster University; University of Michigan System; University of Michigan
摘要：Motivated by the debate about the introduction of the fair value option for (financial) liabilities (FVOL) and the requirement to recognize and separately disclose in financial statements debt valuation adjustments (DVAs), this study explores what we can learn about a firm's credit risk from DVAs. Using a sample of US bank holding companies that elect the FVOL, we show that DVAs generally cannot be explained by the same factors that explain contemporaneous changes in bank's credit quality. We ...
-
作者：Ryan, Stephen; Seitz, Barbara
作者单位：New York University
摘要：Accounting principles state that the net presentation of offsetting assets and liabilities on the balance sheet is improper unless the right of setoff exists. Derivatives dealers and their frequent counterparties enter into master netting agreements (MNAs) that provide a limited right of setoff that is insufficient (sufficient) for net presentation under IFRS (US GAAP). To remedy this presentation difference, as of 2013, IFRS and US GAAP require dealers to disclose the gross, reported, and net...
-
作者：Hope, Ole-Kristian; Li, Congcong; Ma, Mark Shuai; Su, Xijiang
作者单位：University of Toronto; BI Norwegian Business School; Duquesne University; Pennsylvania Commonwealth System of Higher Education (PCSHE); University of Pittsburgh
摘要：The many management guidance withdrawals during the COVID-19 pandemic have attracted considerable attention from the media, investors, and regulators. This study analyzes the determinants and consequences of these withdrawals. We find that guidance withdrawals are due to economic uncertainty, resulting from firms' exposure to the COVID-19 pandemic rather than poor financial performance. Also, the effect of COVID-19 exposure on guidance withdrawals is stronger when firms face higher litigation ...
-
作者：Koonce, Lisa; Leitter, Zheng; White, Brian
作者单位：University of Texas System; University of Texas Austin; Nanyang Technological University
摘要：Managers may strategically use discretion over disclosure language to reduce the effect of bad news, amplify the effect of good news, or both. We experimentally test how a warning highlighting management's discretion over disclosure language affects investors' reactions to more and less readable disclosures. We find that the warning works as intended for good news disclosures, causing investors to reduce their valuations of the firm when readability choices match management incentives. In the ...
