The economic implications of corporate financial reporting

Journal of Accounting and Economics

Volumn 40, Issue 1-3, 2005, Pages 3-73

  Graham, John R ^a   Harvey, Campbell R ^a,b   Rajgopal, Shiva ^c  

^a DUKE UNIVERSITY   (United States)

^b NATIONAL BUREAU OF ECONOMIC RESEARCH   (United States)

^c UNIVERSITY OF WASHINGTON   (United States)

Author keywords

Agency costs; Earnings benchmark; Earnings management; Earnings predictability; Earnings smoothing; Financial statement; Information risk; Voluntary disclosure

Indexed keywords

EID: 19744363773     PISSN: 01654101     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.jacceco.2005.01.002     Document Type: Article

References (116)

1. D. Aboody R. Kasznik CEO stock options awards and the timing of corporate voluntary disclosures Journal of Accounting and Economics 29 2000 73-100
2. E.W. Anderson E. Ghysels J. Juergens Do heterogeneous beliefs and model uncertainty matter for asset pricing? Review of Financial Studies 2005 in preparation
3. Bagnoli, M., Clement, M., Watts, S., 2004. The timing of earnings announcements throughout the day and throughout the week. Working Paper, Purdue University.
4. C. Barry S. Brown Differential information and security market equilibrium Journal of Financial and Quantitative Analysis 20 1985 407-422
5. C. Barry S. Brown Limited information as a source of risk The Journal of Portfolio Management 12 1986 66-72
6. M. Barth J. Elliot M. Finn Market rewards associated with patterns of increasing earnings Journal of Accounting Research 37 1999 387-413
7. M. Barth D. Cram K. Nelson Accruals and prediction of future cash flows The Accounting Review 76 1 2001 27-58
8. J. Barton Does the use of financial derivatives affect earnings management decisions? The Accounting Review 76 1 2001 1-26
9. E. Bartov The timing of asset sales and earnings manipulation The Accounting Review 68 4 1993 840-855
10. E. Bartov D. Givoly C. Hayn The rewards to meeting or beating earnings expectations Journal of Accounting and Economics 33 2 2002 173-204
11. M.D. Beneish Earnings management: A perspective Managerial Finance 27 2001 3-17
12. Beneish, M.D., Press, E., Vargas, M.E., 2004. Insider trading and incentives to manage earnings. Working Paper, Indiana University.
13. Berger, P., Hann, R., 2003. Segment disclosures, proprietary costs, and the market for corporate control. Working Paper, University of Chicago and University of Southern California.
14. V. Bernard T. Stober The nature and amount of information in cash flows and accruals The Accounting Review 64 1989 624-652
15. Bhojraj, S., Libby, R., 2004. Managerial myopia and disclosure frequency. Working Paper, Cornell University.
16. R. Bhushan Collection of information about publicly traded theory and evidence Journal of Accounting and Economics 11 1989 183-207
17. R. Bhushan Firm characteristics and analyst following Journal of Accounting and Economics 11 2-3 1989 255-275
18. C.A. Botosan Disclosure level and the cost of equity capital The Accounting Review 72 3 1997 323-350
19. R. Bowen D. Burgstahler L. Daley The incremental information content of accrual versus cash flows The Accounting Review 61 1987 723-747
20. R. Bowen L. Ducharme D. Shores Stakeholders implicit claims and accounting method choice Journal of Accounting and Economics 20 1995 255-295
21. A. Brav J.R. Graham C.R. Harvey R. Michaely Payout policy in the 21st century Journal of Financial Economics 2005 in preparation
22. M. Britten-Jones The sampling error in estimates of mean-variance efficient portfolio weights Journal of Finance 54 1999 655-671
23. G. Brown Managing foreign exchange risk with derivatives Journal of Financial Economics 60 2001 401-448
24. L. Brown M. Caylor A temporal analysis of quarterly earnings thresholds: propensities and valuation consequences The Accounting Review 80 2005 423-440
25. L. Brown H. Higgins Managing earnings surprises in the U.S. versus 12 other countries Journal of Accounting and Public Policy Winter 2001 373-398
26. W. Bruns K. Merchant The dangerous morality of managing earnings Management Accounting 72 2 1990 22-25
27. Buckmaster, D., 2001. Development of the income smoothing literature 1893-1998: A focus on the United States. In: Previts, G., Bricker, R.J. (Eds.), Studies in the Development of Accounting Thought.
28. Burgstahler, D., 1997. Incentives to manage earnings to avoid earnings decreases and losses: Evidence from quarterly earnings. Working Paper, University of Washington, Seattle.
29. D. Burgstahler I. Dichev Earnings management to avoid earnings decreases and losses Journal of Accounting and Economics 24 1997 99-126
30. B. Bushee The influence of institutional investors on myopic R&D investment behavior The Accounting Review 73 3 1998 305-333
31. B. Bushee D. Matsumoto G. Miller Open versus closed conference calls: the determinants and effects of broadening access to disclosure Journal of Accounting and Economics 34 1-3 2003 149-180
32. L. DeAngelo Managerial competition, information costs, and corporate governance: The use of accounting performance measures in proxy contests Journal of Accounting and Economics 10 1988 3-36
33. P. Dechow Accounting earnings and cash flows as measures of firm performance. The role of accounting accruals Journal of Accounting and Economics 18 1994 3-42
34. P. Dechow D. Skinner Earnings management: Reconciling the views of accounting academics, practitioners, and regulators Accounting Horizons 14 2 2000 235-250
35. P. Dechow R. Sloan Executive incentives and the horizon problem: An empirical investigation Journal of Accounting and Economics 14 1991 51-89
36. P. Dechow R. Sloan A. Sweeney Causes and consequences of earnings manipulation: An analysis of firms subject to enforcement actions by the SEC Contemporary Accounting Research 13 1 1996 1-36
37. M.L. DeFond C.W. Park Smoothing income in anticipation of future earnings Journal of Accounting and Economics 23 1997 115-139
38. F. DeGeorge J. Patel R. Zeckhauser Earnings management to exceed thresholds Journal of Business 72 1 1999 1-33
39. D. Diamond R. Verrecchia Disclosure, liquidity, and the cost of capital The Journal of Finance 66 1991 1325-1355
40. K.B. Diether C. Malloy A. Scherbina Differences of opinion and the cross-section of stock returns Journal of Finance 57 2002 2113-2142
41. R. Dye An evaluation of "essays on disclosure" and the disclosure literature in accounting Journal of Accounting and Economics 32 1-3 2001 181-235
42. D. Easley M. O'Hara Information and the cost of capital Journal of Finance 2004
43. M. Erickson M. Hanlon E.L. Maydew How much will firms pay for earnings that do not exist? Evidence of taxes paid on allegedly fraudulent earnings The Accounting Review 79 2004 387-408
44. K. Farrell D. Whidbee Impact of firm performance expectations on CEO turnover and replacement decisions Journal of Accounting & Economics 36 1-3 2003 165-196
45. Feng, M., 2004. Earning management strategies to beat multiple thresholds. Working Paper, University of Michigan.
46. T. Fields T. Lys L. Vincent Empirical research on accounting choice Journal of Accounting & Economics 31 2001 255-307
47. J.C. Flanagan The critical incident technique Psychological Bulletin 51 1954 327-358
48. J. Francis D. Philbrick K. Schipper Shareholder litigation and corporate disclosures Journal of Accounting Research 32 1994 137-165
49. Francis, J., LaFond, R., Olsson, P., Schipper, K., 2002. The market pricing of earnings quality. Working Paper, Duke University.
50. Francis, J., Huang, A., Rajgopal, S., Zang, A., 2004. CEO reputation and reporting quality. Working Paper, Duke University.
51. M. Friedman The Methodology of Positive Economics. Essays in Positive Economics 1953 University of Chicago Press Chicago pp. 3-43
52. Ghysels, E., Juergens, J.L., 2001. Stock market fundamentals and heterogeneity of beliefs: Tests based on a decomposition of returns and volatility paper at http://papers.ssrn.com/sol3/ papers.cfm?abstract_id=301836.
53. A. Goyal P. Santa-Clara Idiosyncratic risk matters! Journal of Finance 58 2003 975-1007
54. J.R. Graham C.R. Harvey The theory and practice of corporate finance: evidence from the field Journal of Financial Economics 60 2001 187-243
55. W. Guay S.P. Kothari R. Watts A market-based evaluation of discretionary-accrual models Journal of Accounting Research 34 Suppl. 1996 83-115
56. J. Hand Did firms undertake debt-equity swaps for an accounting paper profit or true financial gain? Accounting Review 64 4 1989 587-624
57. D. Hausman Why Look under the Hood? The Philosophy of Economics: An Anthology second ed 1992 Cambridge University Press Cambridge pp. 17-21
58. P. Healy The impact of bonus schemes on the selection of accounting principles Journal of Accounting and Economics 7 1985 85-107
59. P. Healy K. Palepu Information asymmetry, corporate disclosure, and the capital markets: A review of the empirical disclosure literature Journal of Accounting and Economics 31 2001 405-440
60. P. Healy J. Wahlen A review of the earnings management literature and its implications for standard setting Accounting Horizons 13 1999 365-383
61. F. Hodge Investors' perceptions of earnings quality, auditor independence, and the usefulness of audited financial information Accounting Horizons 17 Supplement 2003 37-48
62. Hutton, A., 2003. The determinants and consequences of managerial earnings guidance prior to regulation Fair Disclosure. Working Paper, Tuck School of Business at Dartmouth.
63. T. Johnson Forecast dispersion and the cross section of expected returns Journal of Finance 59 2004 1957-1978
64. J. Jones Earnings management during import relief investigations Journal of Accounting Research 29 2 1991 193-228
65. P. Jorion International portfolio diversification with estimation risk Journal of Business 58 1985 259-278
66. Y. Kamin J. Ronen The smoothing of income numbers: Some empirical evidence on systematic differences among manager-controlled and owner-controlled firms Accounting, Organizations and Society 3 2 1978 141-157
67. C. Kanodia A. Mukherji Real effects of separating investment and operating cash flows Review of Accounting Studies 1 1 1996 51-71
68. S.P. Kothari Capital markets research in accounting Journal of Accounting and Economics 31 2001 105-231
69. O. Kim R. Verrecchia Market liquidity and volume around earnings announcements Journal of Accounting and Economics 17 1994 41-68
70. R. Klein V. Bawa The effect of estimation risk on optimal portfolio choice Journal of Financial Economics 3 1976 215-231
71. M. Lang R. Lundholm Corporate disclosure policy and analyst behavior The Accounting Review 71 1996 467-493
72. Leuz, C., Verrecchia, R., 2004. Firms' capital allocation choices, information quality, and the cost of capital. University of Pennsylvania Working Paper.
73. B. Lev Intangibles: Management, Measurement, and Reporting 2001 The Brookings Institution Washington, DC
74. B. Lev Corporate earnings: Facts and fiction Journal of Economic Perspectives 17 2003 27-50
75. J. Liu D. Nissim J. Thomas Equity valuation using multiples Journal of Accounting Research 40 2002 135-172
76. S. Matsunaga C. Park The effect of missing a quarterly earnings benchmark on the CEO's annual bonus The Accounting Review 76 2001 313-332
77. R.C. Merton A simple model of capital market equilibrium with incomplete information Journal of Finance 42 1987 483-510
78. E.M. Miller Risk, uncertainty, and divergence of opinion Journal of Finance 32 1977 1151-1168
79. Miller, G., Piotroski, J., 2000. The role of disclosure for high book-to-market Unpublished Working Paper, Harvard University.
80. F. Mittelstaedt W. Nichols P. Regier SFAS No. 106 and benefit reductions in employer-sponsored retiree health care plans The Accounting Review 70 1995 535-556
81. K.J. Murphy J.L. Zimmerman Financial performance surrounding CEO turnover Journal of Accounting and Economics 16 1993 273-315
82. Myers, L., Skinner, D., 1999. Earnings momentum and earnings management. Working Paper, University of Illinois at Urbana-Champaign and University of Michigan.
83. D.J. Nanda V. Nagar P. Wysocki Discretionary disclosure and stock-based incentives Journal of Accounting and Economics 34 1-3 2003 283-309
84. M. Nelson J. Elliot R. Tarpley Evidence from auditors about managers' and auditors' earnings management decisions The Accounting Review 77 2002 175-202
85. M. Nelson J. Elliot R. Tarpley How are earnings managed? Examples from auditors Accounting Horizons 17 Suppl. 2003 17-35
86. G. Niehaus G. Roth Insider trading, equity issuance and CEO turnover in firms subject to securities class actions Financial Management 28 1999 52-72
87. C. Noe Voluntary disclosures and insider transactions Journal of Accounting and Economics 27 1999 305-327
88. M. O'Hara Presidential address: Liquidity and price discovery Journal of Finance 58 2003 1335-1354
89. W. Parfet Accounting subjectivity and earnings management: A preparer's perspective Accounting Horizons 14 4 2000 481-488
90. V. Pastena J. Ronen Some hypotheses on the pattern of management's informal disclosures Journal of Accounting Research 17 2 1979 550-570
91. L. Pastor P. Veronesi Stock valuation and learning about profitability Journal of Finance 58 2003 1749-1790
92. S. Penman X. Zhang Accounting conservatism, the quality of earnings, and stock Returns Accounting Review 77 2002 237-264
93. S. Pourciau Earnings management and nonroutine executive changes Journal of Accounting and Economics 16 1993 317-336
94. S. Rajgopal M. Pincus The interaction between accrual management and hedging: Evidence from oil and gas firms The Accounting Review 77 1 2002 127-160
95. Rauh, J., 2004. Investment and financing constraints: Evidence from the funding of corporate pension plans. University of Chicago Working Paper.
96. J. Rayburn The association of operating cash flow and accruals with security returns Journal of Accounting Research Suppl. 1986 112-133
97. J. Ronen S. Sadan Smoothing Income Numbers: Objectives and Implications 1981 Addison-Wesley Reading, MA
98. Roychowdhury, S., 2003. Management of earnings through the manipulation of real activities that affect cash flow from operations. Working Paper, Sloan School of Management, MIT.
99. P. Sengupta Corporate disclosure quality and the cost of debt The Accounting Review 73 1998 459-474
100. T. Shevlin D. Shackelford Empirical tax research in accounting Journal of Accounting and Economics 31 1-3 2001 321-387
101. D. Skinner Why voluntarily disclose bad news? Journal of Accounting Research 32 1994 38-61
102. D. Skinner Earnings disclosures and stockholder lawsuits Journal of Accounting and Economics 23 1997 249-283
103. D. Skinner R. Sloan Earnings surprises, growth expectations, and stock returns or don't let an earnings torpedo sink your portfolio Review of Accounting Studies 7 2-3 2002 289-312
104. R. Sloan Do stock prices fully reflect information in accruals and cash flows about future earnings? The Accounting Review 71 1996 289-315
105. S. Sudman N. Bradburn Asking Questions: A Practical Guide to Questionnaire Design 1983 Jossey Bass San Francisco
106. S. Tasker Bridging the information gap: Quarterly conference calls as a medium for voluntary disclosure Review of Accounting Studies 3 1 1998 137-167
107. S. Teoh I. Welch T.J. Wong Earnings management and the long-run market performance of initial public offerings Journal of Finance 53 6 1998a 1935-1974
108. S. Teoh I. Welch T.J. Wong Earnings management and the underperformance of seasoned equity offerings Journal of Financial Economics 50 1 1998b 63-99
109. E. Trahan L. Gitman Bridging the theory-practice gap in corporate finance. A survey of Chief Financial Officers Quarterly Review of Economics and Finance 35 1995 73-87
110. B. Trueman Why do managers voluntarily release earnings forecasts? Journal of Accounting and Economics 8 1986 53-72
111. R. Verrecchia Essays in disclosure Journal of Accounting and Economics 32 1-3 2001 97-180
112. R. Watts J. Zimmerman Towards a positive theory of the determination of accounting standards The Accounting Review 53 1978 112-113
113. R. Watts J. Zimmerman Positive Accounting Theory 1986 Prentice Hall Englewood Cliffs, NJ
114. R. Watts J. Zimmerman Positive accounting theory: A ten year perspective The Accounting Review 65 1990 131-156
115. P. Wilson The relative information content of accruals and cash flows: combined evidence at the earnings announcement and annual report release date Journal of Accounting Research 24 Suppl. 1986 165-200
116. Y. Xia Learning about predictability: The effects of parameter uncertainty on dynamic asset allocation Journal of Finance 56 2001 205-246