Journal of Accounting Research最新文献

We find that foreign-born CEOs are more inclined than domestic-born ones to acquire across borders, and that this inclination is explained by their preference for targets in their birth country. This preference is motivated by foreign-born CEOs’ information advantage in their birth country and by these CEOs’ desire to give back to the birth country. CEOs’ desire to help their birth country also influences target location, increasing the likelihood of a target in countries that colonized the CEO birth country. The motives that drive acquisitions in acquirer CEOs’ birth countries measurably affect the returns of acquirers’ shareholders, target premium, and acquisition synergy. Both acquirers’ returns and synergy but not target premium are abnormally positive when the motive for an acquisition is a CEO's information advantage in the birth country. Targets premiums but not acquirers’ returns and synergy are abnormally positive when the motive for an acquisition is the desire to give back to the CEO's birth country.

We investigate whether improvements in banks' organizational capital and control systems facilitate increased loan origination to minority borrowers. We focus on bank supervisors' enforcement decisions and orders (EDOs) against banks and hypothesize that EDO-imposed improvements in loan policies, internal governance, and employee training mitigate deficiencies in credit assessments and lending decisions that previously disadvantaged minority borrowers. We find that mortgage origination to minority borrowers increases following the resolution of EDOs, and more so for banks with stricter supervisors or more severe EDOs. Using a semisupervised machine learning method to analyze the text of EDOs, we find that such increases are higher for EDOs specifying revisions of loan policies, implementation of formal internal governance procedures, or more employee training. Overall, we find that EDO-driven improvements in organizational capital generate unintended, positive social externalities that enhance access to credit for minority borrowers.

Forward-looking information, often used by auditors to evaluate complex estimates and form conclusions about going-concern audit report modifications, is commonly disclosed voluntarily by U.S. public companies. We experimentally examine how this disclosure behavior affects auditors’ skepticism toward such information. Prior research has shown that investors and analysts frequently interpret voluntarily disclosed forward-looking information as credible. We demonstrate that auditors, in contrast, exhibit greater skepticism toward forecasted information that has been voluntarily disclosed (vs. mandatorily disclosed or held privately) because of their reduced trust in management, even when the forecasts align with prior year trends (vs. being more optimistic). Our results suggest that a manager's decision to disclose, rather than the disclosure content itself, leads to increased auditor skepticism. Our findings have implications not only for audit outcomes, but also for manager disclosure behavior, as increased auditor scrutiny could discourage future voluntary disclosure.

This study examines whether mandatory increase in reporting frequency exacerbates agency problems. Utilizing the setting of the 2004 SEC mandate on increased reporting frequency of mutual fund holdings, we show that increased reporting frequency elevates window dressing (buying winners or selling losers shortly before the end of the reporting period). This effect is driven by low-skill fund managers’ incentives to generate mixed signals. Funds managed by low-skill managers experience lower returns, more outflows, and a higher collapse rate when their window dressing is elevated after the 2004 rule change. These results suggest that, although higher reporting frequency on agents’ actions can exacerbate signal manipulations, the related manipulation costs improve sorting among agents in the longer term.

We exploitthe introduction of the Payment Practices Disclosure Regulation in the United Kingdom (UK) to examine the effects of mandating disclosure of customer-supplier payment practices. We find that nondisclosing small and medium-sized enterprises (SMEs) experience a reduction in their accounts receivable by 8.3%, consistent with an acceleration of their trade credit collections. Further, SMEs exhibit fewer financial constraints after the regulation. We survey managers from large firms and SMEs to understand the underlying mechanisms. The required disclosures raise large firms’ reputational concerns and shift the bargaining power between large firms and SMEs. Additionally, the new disclosures compel executives at large firms to scrutinize their own firms’ payment practices, leading to increased accountability and a stronger focus on timely payment among senior managers.

We document significant increases in bond market liquidity around earnings announcements. These increases are attributed to decreased search and bargaining costs, which arise from the over-the-counter (OTC) nature of bond markets and outweigh increases in information asymmetry during these periods. Our evidence traces reductions in search and bargaining costs to two sources around earnings announcements: (1) improved access to dealers and (2) increased participation from institutional investors, who can more easily transact with multiple dealers. Overall, our findings highlight a novel channel through which firm-specific information affects asset prices.