Recent high-profiled accounting scandals (e.g., Enron and WorldCom) have called into question the quality of financial reporting in the U.S. These accounting scandals have resulted in massive restatements of corporate earnings and market value losses to investors. While earnings restatements have become more prevalent and costly in recent years, detection or prediction of earnings restatement h...

Dichev and Tang (2008) (this issue) document the incremental predictive power of past earnings volatility for the persistence of current earnings. We revisit their findings by allowing for several theoretically motivated factors (firm size, earnings growth, and the extent of managerial accounting discretion as detected by abnormal accruals) in order to verify the robustness of this effect. We a...

This paper examines whether managers signal firms’ future performance by managing earnings to exceed thresholds. Because managers’ reporting discretion is bounded by the accounting regulations, managing earnings to exceed current period’s thresholds reduces future earnings and therefore makes future earnings thresholds harder to reach. As a result, only firms with sufficient future earnings gro...

Previous literature studying analysts’ earnings forecasts examines their properties without considering firms’ response to analysts’ forecasts. This study improves upon previous research by considering firms’ earnings management with respect to analysts’ forecasts. I hypothesize that analysts understand firms’ earnings management practices, and incorporate firms’ expected behavior into their fo...

This study seeks to examine the determinants of revenue manipulation by focusing on factors that have unique implications for revenue. Based on a sample of financial restatements arising from aggressive accounting, I control for general earnings management incentives by comparing revenue restatement firms with non-revenue restatement firms. I predict and find that firms with (i) higher growth p...

I nvestors’ conŽ dence in the quality and integrity of corporate Ž nancial reports has been seriously shaken of late. The ever-increasing procession of headlines about fraudulent earnings, in ated asset values and understated liabilities reported by erstwhile leading companies—the likes of Enron, Tyco, WorldCom, Xerox and a host of lesser household names, all audited by major accounting Ž rms—...

In a competitive information market, a single information source can only dominate other sources individually, not collectively. We explore whether earnings announcements constitute such a dominant source using Ball and Shivakumar’s (2008) R metric: the proportion of the variation in annual returns explained by the four quarterly earnings announcement returns. We find that the earnings announce...

CONTEXT Earnings have been shown to be a critical point in workforce recruitment and retention. However, little is known about how much governmental public health staff are paid across the United States. OBJECTIVE To characterize earnings among state health agency central office employees. DESIGN A cross-sectional survey was conducted of state health agency central office employees in late ...