Contemporary Accounting Research最新文献

Short interest is currently required to be disclosed twice per month, but regulators have sought to increase this frequency. Meanwhile, short interest information from private third-party vendors has emerged to meet investor demand on a daily basis. We find that daily private-sector data strongly predict bimonthly regulatory disclosure. Furthermore, private-sector data help price discovery, albeit with modest economic magnitude. Investors tend to underreact to the information content of private-sector data mainly due to limits to arbitrage rather than market inattention. Despite the costly access to private-sector data, we find no evidence that retail investors are harmed in their trades. Overall, our findings highlight the interplay between private-sector and regulatory solutions in enhancing financial market transparency.

The Statement of Financial Accounting Standards (SFAS) No. 158 mandates the recognition of previously disclosed off–balance sheet liabilities (OBLs) for sponsors of defined benefit (DB) retirement plans. This recognition significantly increases reported liabilities, with notable variation across DB plan sponsors. We find that unrated DB plan sponsors reduce financial leverage following OBLs recognition, driven by net debt retirements and net equity issuances. These adjustments appear optimal because they bring firms closer to their estimated leverage targets. In contrast, DB plan sponsors with tight, floating-GAAP covenants also reduce financial leverage, primarily through net debt retirements. The evidence suggests that on–balance sheet reporting requirements impact capital structure decisions through a rating or a covenant channel.

Security prices are affected by information strategically disclosed by managers as well as by informed trading of outsiders and vice versa. However, market frictions, such as short-selling costs and constraints, significantly affect trading in financial markets. In this article, we examine the joint determination of voluntary disclosure, security prices, and short-selling, and address the following issues: How do major market frictions affect managerial disclosures? How do disclosures influence strategic informed trading in the presence of frictions? What does the interaction of strategic disclosure and informed trading imply for price efficiency? We find that short-selling (trading) costs have a substantial impact on the equilibrium disclosure policy and its interaction with informed trading and price efficiency. Because of endogenously binding short-sale constraints, better-informed traders can either deter or encourage disclosure, thus reconciling mixed available evidence on the relation between short-sale constraints and managerial disclosure. Furthermore, price efficiency need not improve with managers' information endowment because greater disclosure can endogenously inhibit informed short-selling in equilibrium. Our analysis also generates novel empirical predictions relevant to the literature on managerial disclosure, shorting, and price efficiency.

We provide evidence that some managers use a multi-period, coordinated strategy involving inflated current-period discretionary accruals and optimistic forecasts of future earnings to delay the revelation of bad news. Inflating discretionary accruals increases investor expectations of future performance, and issuing optimistic earnings forecasts of future earnings supports the inflated accruals and extends the horizon for managers to benefit. This strategy is more pronounced for firms that engage in earnings management outside of GAAP, suggesting intentional behavior. Our evidence indicates that managers use this coordinated strategy when firms experience significant bad news and cannot delay revealing all of the bad news through accrual management. We also find that managers use this coordinated strategy when focusing on short-term performance due to career concerns (i.e., dismissal) or retirement or when they have shorter stock option vesting schedules, which motivates them to inflate investor expectations for shorter-term personal benefits. Furthermore, managers using this strategy do not hold deep in the money exercisable stock options, which is consistent with managers' private assessment of a higher (lower) likelihood of releasing bad (good) news in the future.

This paper examines how a low-skilled, gendered occupational group collectively counters representations of its contribution to organizational performance. We situate this process within the literature on counter accounts—alternative representations designed to rectify perceived harms or injustices. Our study focuses on cashiers, referred to as “checkout hostesses” in their organization's gendered terminology, in the highly masculine building supplies sector. Drawing on a feminist theorization of counter accounts and a 1-year ethnography at two levels (in a store and in a cashiers' working group), we show that cashiers produce three counter accounts: (1) a vocational qualification that highlights their accounting and selling skills, (2) a reframing of their customer credit activities as a contribution to sales, and (3) a quantification of their selling activity in a dashboard tracking sales at the checkout. These counter accounts challenge patriarchal social structures that frame their job as a low-status “woman's job,” objectify them, and overshadow their contribution to organizational performance. We advance the concept of counter accounts from the inside, showing that they do not merely denounce oppression but also repurpose stereotypical gender and class norms as resources for collective empowerment. We also emphasize how internal organizational support fosters occupational groups' awareness of their agency. Finally, we argue that the potential and limitations of counter accounts must be assessed from the perspective of the vulnerable group itself, broadening their understanding as emancipatory tools produced for the “other” by the “other.”

We examine the extent to which the distribution of corporate shareholdings affects seasonality in realized returns and the resulting implications for the conditions under which information asymmetry (IA) appears to be priced. Earlier studies have found that IA attracts a return premium only for firms with low competition for their stock, as proxied by the number of common shareholders or the number and concentration of institutional holdings. However, we demonstrate that the association between these proxies for competition and the pricing of IA is restricted to the month of January, is increasing in the potential for tax-loss selling, concentrates in the first days of the tax year, and exists regardless of firms' fiscal year-end dates. Overall, our evidence suggests that the association between the distribution of shareholdings and the pricing of IA reflects variation in mispricing arising from tax-loss selling rather than compensation for the risk of trading at an information disadvantage.

Researchers have studied the entry of professionals into the public accounting field, their careers at an organization, and their exit from the field. However, they have largely overlooked the mobility of these professionals, whose careers involve firm transfers. Drawing on Bourdieu's sociology and interviews with 31 transferees and 7 non–Big 4 legacy partners, we examine the move of Big 4 professionals to non–Big 4 firms. Our findings show that transferees have an ingrained belief that a Big 4 career is the ideal professional trajectory. But they experience points of disjuncture at these firms, prompting them to reevaluate this organizational illusio and their career aspirations and ultimately reinforcing their transfer decision. After moving, transferees learn by trial and error how to valorize and layer their habitus and different forms of capital in order to adjust to the non–Big 4 firms. Our findings challenge prior assumptions about the superiority of Big 4 professionals and the distinctive forms of their capital by showing that the capital needed to obtain powerful positions at Big 4 and non–Big 4 firms are similar, but that its nature and relative value varies. Our findings reveal a paradoxical dynamic in which transferees' Big 4 habitus and capital undergo a complex, iterative process of valorization and layering when these professionals move within the public accounting field. This contrasts with a materialization of professional domination that occurs when former Big 4 employees move outside the public accounting field. For most of our transferees, dissonance also develops between the Big 4 and non–Big 4 layers of their habitus, and they never completely deconstruct their organizational illusio. These findings reveal that the reflexivity of transferees is both shaped and limited by their Big 4 habitus and illusio. Overall, our results contribute to the understanding of professional mobility within the public accounting field.

We examine the association between target firms' public non-GAAP earnings disclosures and merger and acquisition (M&A) efficiency. This research question is important, given the widespread use of non-GAAP metrics in M&A valuation and lack of evidence regarding the real effects of non-GAAP disclosure. Public non-GAAP disclosure can enhance bidders' ability to assess a target's core earnings and potential synergy, especially in the earlier stages of due diligence, and enable bidders to make better M&A decisions. We find that target firms' non-GAAP disclosures are associated with greater M&A efficiency, greater synergies, and lower likelihood of post-acquisition goodwill impairment. We also find some evidence that target firms' non-GAAP disclosures are positively related to post-acquisition operating performance. Further, we find modest evidence that the positive relation between non-GAAP disclosures and M&A efficiency is stronger (1) for targets that are more difficult to value, (2) for targets with weaker information environments, and (3) when targets' non-GAAP numbers are of higher quality. Overall, our evidence suggests that non-GAAP disclosures help facilitate efficient resource allocation in M&As and are associated with real effects on corporate investment. Our evidence is potentially relevant to regulators' concerns about the usefulness of non-GAAP metrics.

Prior research demonstrates that audit professionals encounter client incivility. We extend this research by examining whether client incivility negatively impacts auditors' judgments and whether any adverse effects are reduced when auditors use coping strategies. We first collect descriptive survey evidence revealing that client incivility toward auditors is more widespread than currently documented. Next, using an experiment, we predict and find that auditors who experience client incivility (vs. those who do not) are less likely to challenge aggressive reporting if they are not prompted to cope. We also find that active coping reduces the adverse impact of client incivility, whereas findings for passive coping are inconclusive. Audit standards and users of financial statements expect auditors to fulfill their duty of maintaining a high level of professional skepticism irrespective of external circumstances. Our findings highlight the challenges auditors face in meeting these expectations when facing uncivil clients, thus posing a threat to audit quality.

We examine whether audit partner individualism reduces earnings comparability in the United States. We argue that individualistic audit partners are more likely to deviate from internal working rules and allow clients more flexibility in making accounting choices, consequently decreasing their clients' earnings comparability. Using a novel partner-level measure of individualism, we find that within individual Big 4 audit firms, earnings are less comparable between a company audited by an individualistic partner and a company audited by a non-individualistic partner, relative to a pair of companies that are each audited by a non-individualistic partner. Our inferences are robust to a changes analysis, a falsification test, and a propensity score matching procedure. We also find that the effect of partner individualism is less salient when the audit firm is under more stringent regulatory monitoring and when clients are more important, but more salient when individualistic partners are more confident about being different. Further analyses suggest that our main inferences are robust to controlling for differences in partners' cultural backgrounds and using client-pairs audited by the same audit partner. Collectively, our study provides novel evidence on the role of auditor individualism in earnings comparability.