Earnings disclosures and stockholder lawsuits

Article Abstract:

Voluntary earnings declarations occur more timely in quarters that result in litigation than in non-lawsuit quarters, based on study that offers evidence on the relationship between the timeliness of earnings declaration and stockholder litigation. Manager's propensity to predisclose dismal news is attributed to the fact the costs of settling litigation may be decreased by earlier disclosure. The practice of managers of earlier disclosure of bad earnings news than other kinds of earnings news is found to be widespread.

Investor Relations, Economic aspects, Disclosure statements (Accounting)

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What motivates manager's choice of discretionary accruals?

Article Abstract:

Manipulation of accounting accruals by management have been shown by the studies of Subramanyan and Kasanen, et.al, to be due to the desire of companies to improve performance measures and demands for dividends by large institutional investors, representing informational and opportunistic incentives in the accounting of earnings.

Dividend Policy, Management, Usage, Profits, Dividends, Accrual basis accounting, Corporate profits

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Are disclosures about bank derivatives and employee stock options 'value-relevant?' (response to articles by Venkatachalam, p.327 and Aboody, p.357, in this issue)

Article Abstract:

Cross sectional 'levels' studies conducted by Venkatachalam and Aboody to validate the value-relevance of disclosing values of bank derivatives and employee stock options suffer from methodological insufficiencies that render their conclusions confined to narrow parameters which lead to interpretational difficulties.

Research, Accounting, Disclosure (Securities law)

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