In this discussion of Almeida and Dalmacio (2015), we highlight some theoretical considerations that links analyst forecast properties with two disciplining mechanisms (i.e. product market competition and corporate governance) and also provide some directions for future research especially in the Brazilian context. © 2015 University of Illinois. All rights reserved. JEL classification: G15; G30...

Previous studies have examined the manipulation of executive stock option awards and exercises, focusing on information timing by managers. In this paper, we investigate potential managerial manipulation of stock-price performance motivated by executive stock options. To distinguish performance manipulation from information timing, we examine stock-price performance surrounding the departure of...

Financial reporting and disclosure are potentially important means for management to communicate firm performance and governance to outside investors. We provide a framework for analyzing managers’ reporting and disclosure decisions in a capital markets setting, and identify key research questions. We then review current empirical research on disclosure regulation, information intermediaries, a...

SYNOPSIS Extant literature demonstrates that whistleblowing is associated with changes in the target’s financial reporting. This paper provides compelling evidence also affects peer firms’ Specifically, we find industry peers reduce their reporting aggressiveness following a allegation. deterrent effect stronger when firm geographically closer to target, and target share board member, predicted...

ABSTRACT We study the optimal information system in a debt contracting setting which managers can engage value destroying risk-shifting behavior. The issues early-warning signals that allow lenders to take corrective actions such as liquidating unprofitable projects. When are empire builders, exhibits conservative bias leads excessive and project liquidations relative first best. In contrast, w...

SUMMARY This paper examines whether and how firms’ engagement in related-party transactions (RPTs) is shaped by public communication of audit risks as required the expanded report. Using phased regulatory changes China a difference-in-differences design with firm fixed effects matching, we find that firms significantly reduce their RPTs after adoption reports (EARs). To investigate potential me...

We develop a rational expectations equilibrium model in which noise trading comes from discretionary liquidity traders. The equilibrium quantity of aggregate noise trading is endogenously determined by the population size of liquidity traders active in the financial market. By improving market liquidity, public information reduces the expected trading loss of liquidity traders and thus attracts...