-
作者：Chen, Xia; Feng, Mei; Li, Chan
作者单位：Singapore Management University; Pennsylvania Commonwealth System of Higher Education (PCSHE); University of Pittsburgh; University of Kansas
摘要：\We examine whether family owners exploit internal control weaknesses for entrenchment purposes and whether the public disclosure requirement under SOX 404 helps alleviate this entrenchment. We find supportive evidence for both questions. In the initial years of SOX 404 implementation (2004 and 2005), ineffective internal control in family CEO firms is more conducive to entrenchment - measured by the occurrence of misstatements, frauds, and related party transactions - than ineffective interna...
-
作者：Dharwadkar, Ravi; Harris, David; Shi, Linna; Zhou, Nan
作者单位：Syracuse University; University System of Ohio; University of Cincinnati
摘要：We document that the initiation of audit committee interlocks is associated with contagion in reported special items. We argue that this is, in part, attributable to contagion of accounting policy choices. We find that the special items of newly interlocked firms, unrelated before interlock, become positively correlated afterward, suggesting information transfer starts with interlock formation. This result holds for negative special items, key components of special items (asset impairments, re...
-
作者：Ji, Yuan; Potepa, James; Rozenbaum, Oded
作者单位：Montana State University System; Montana State University Bozeman; George Washington University
摘要：Accounting regulations require firms to separately disclose the profits and losses from discontinued operations. These discontinued operations are typically excluded from the definition of income used by investors, analysts, and others. Barua, Lin, and Sbaraglia (2010) show that managers manipulate earnings by shifting core expenses into discontinued operations. In light of recent changes in the regulations pertaining to this item, we reexamine this finding. The new rules, which change the cri...
-
作者：Duerr, Oliver; Nisch, Markus; Rohlfing-Bastian, Anna
作者单位：Goethe University Frankfurt
摘要：This paper analyzes a principal-agent model with three risk-averse players to investigate incentive provision and optimal team size in a setting with uncertain productivity and team synergies. A principal hires a team of workers and a manager to supervise the team. Workers provide productive effort, whereas the manager exerts effort to reduce measurement noise and productivity risk. We find that moral hazard is a limiting factor for team size and that the risk from uncertain productivity leads...
-
作者：McMullin, Jeff L.; Schonberger, Bryce
作者单位：Indiana University System; Indiana University Bloomington; IU Kelley School of Business; University of Rochester
摘要：This study assesses whether the accrual-generating process is adequately described by a linear model with respect to a range of underlying determinants examined by prior literature. We document substantial departures from linearity across the distributions of accrual determinants, including measures of size, performance, and growth. To incorporate non-linear relations, we employ a recently developed multivariate matching approach (entropy balancing) to adjust for determinants in place of relyi...
-
作者：Ball, Ryan T.; Bonham, Jonathan; Hemmer, Thomas
作者单位：University of Michigan System; University of Michigan; University of Chicago; Rice University
摘要：We examine the manner and extent to which firms evaluate performance relative to aspirational peer firms. Guided by the predictions of an agency model, we find that CEO compensation increases in the correlation between own and aspirational peer firm performances. In addition, we define and test conditions where aggregate peer performance, which has been the primary focus of prior relative performance evaluation studies of competitive peers, is expected to have an association with CEO compensat...
-
作者：Mohanram, Partha; White, Brian; Zhao, Wuyang
作者单位：University of Toronto; University of Texas System; University of Texas Austin
摘要：Stock-based compensation (SBC) reduces the value of shareholder equity, ceteris paribus, and is a significant and growing expense for many firms. Despite its valuation implications and its growing importance, anecdotal evidence suggests that market participants ignore SBC in valuation. We first find that firms with higher SBC exhibit both higher valuation ratios and lower returns, suggesting overvaluation. This pattern is stronger for firms with larger analyst coverage, implying that the sell-...
-
作者：Chen, Xia; Cheng, Qiang; Hao, Ying; Liu, Qiang
作者单位：Singapore Management University; Beijing Normal University; Zhejiang University
摘要：Using data from China, we examine whether and how the incentive to boost GDP growth at the government level affects earnings management at the firm level. We find that firms in provinces with GDP growth lower than the national level or the average of the adjacent provinces are more likely to engage in earnings management than firms in other provinces. Specifically, they are more likely to inflate revenues, overproduce, and delay asset impairment losses. The aggregate earnings management induce...
-
作者：Cheng, C. S. Agnes; Wang, Kun; Xu, Yanping; Zhang, Ning
作者单位：Hong Kong Polytechnic University; Tsinghua University; Jinan University; Queens University - Canada
摘要：We examine whether the revelation of individual audit partner reputation affects client firms' external financing choice. Specifically, we investigate whether a firm switches its financing choices once its auditor partner is perceived to be a low-quality partner, captured by whether one of the audit partner's other clients is sanctioned for financial misreporting. We identify firms audited by a low-quality partner as the treatment firms and designate firms audited by other audit partners from ...
-
作者：Ball, Ryan T.; Gallo, Lindsey; Ghysels, Eric
作者单位：University of Michigan System; University of Michigan; University of North Carolina; University of North Carolina Chapel Hill; University of North Carolina School of Medicine
摘要：We examine whether the contribution of firm-level accounting earnings to the informativeness of the aggregate is tilted towards earnings with specific financial reporting characteristics. Specifically, we investigate whether considering the smoothness of firm-level earnings increases the informativeness of aggregate earnings for future real GDP, and if so, whether macroeconomic forecasters use this information efficiently. Using recently-developed mixed data sampling methods, we find that the ...
