We investigate whether the positive associations between discretionary accrual proxies and beating earnings benchmarks hold for comparisons of groups segregated at other points in the distributions of earnings, earnings changes, and analystsbased unexpected earnings. We refer to these points as ‘‘pseudo’’ targets. Results suggest that the positive association between discretionary accruals and ...

Mr. Crockett: May I make an analogy and see whether it conveys any insights? In the finance field, we think of technology and liberalization as having driven the enormous changes in financial markets. Technology enables the better pricing of risk; liberalization allows risk to be more efficiently managed and traded. Could one say that something similar is taking place in labor markets? Technolo...

In the 1990s, Colombia, the Dominican Republic, Ecuador, Costa Rica, and Brazil passed dual citizenship laws granting their expatriates the right to naturalize in the receiving country without losing their nationality of origin. I estimate the effects of these new laws on naturalization rates and labor market outcomes in the United States. Based on data from the 1990 and 2000 U.S. censuses, I f...

the purpose of this paper is to investigate the association between the intellectual capital of firms and their earnings quality. the research was conducted with 158 accepted companies and 948 firm-year observations from iran stock market. empirical studies were conducted based on hypothesis by value added intellectual coefficient as measures of intellectual capital and taking absolute value of...

We reexamine the existence of earnings announcement-day premia and find that they persist beyond the sample period of earlier studies, over different disclosure environments and remain robust to the refinement of using the expected announcement day rather than the actual announcement day. We provide evidence that the premia are reduced in the presence of earnings pre-announcements. We document ...

Subjects in a controlled laboratory experiment choose a withdraw policy from a cash flow evolving according to an arithmetic Brownian motion. Earnings are based on total withdraws but aggressive withdraw policies expose the subject to risk of ruin. The policy that maximizes expected earnings does not, in general, maximize the odds of survival. We find that in treatments in which wealth maximiza...

We find that the positive relation between aggregate accruals and one-year-ahead market returns documented in Hirshleifer, Hou and Teoh [2009] is driven by discretionary accruals but not normal accruals. The return forecasting power of aggregate discretionary accruals is robust to choices of sample periods, return measurements, estimation methods, business condition and risk premium proxies, an...

Subjects in a laboratory experiment withdraw earnings from a cash reserve evolving according to an arithmetic Brownian motion in near-continuous time. Aggressive withdrawal policies expose subjects to risk of bankruptcy but the policy that maximizes expected earnings need not maximize the odds of survival. When profit maximization is consistent with high rates of survival (HS treatments), subje...

Theory suggests that managers issue earnings forecasts to reduce information asymmetry. An earnings forecast is more effective in reducing information asymmetry if it contains earnings news that is relatively more informative about the firm’s value. We hypothesize that a manager is more likely to issue an earnings forecast if investors perceive that earnings are more informative. We measure ear...

In recent years, many companies have emphasized adjusted-GAAP earnings numbers in their quarterly press releases. While managers use different names to describe these nonstandard earnings metrics, the financial press frequently refers to them as ‘‘pro forma’’ earnings. Managers and other advocates of pro forma reporting argue that these disclosures provide a clearer picture of companies’ core e...