International differences in the timeliness, conservatism, and classification of earnings
Article Abstract:
An analysis of differences in the timeliness, conservatism, and classification of earnings reports from the US and UK is presented along with a formal model in which the response of earnings to market-value changes varies according to whether the value change is positive or negative. Earnings are examined both before and after extraordinary items. Findings include tolerance in the UK of large transitory write-offs before the introduction of the FRS No. 3 regulation in 1993, whereas in the US many such items would have been classified as part of ordinary earnings. The degree of conservatism earnings display before extraordinary items is higher under US GAAP than UK GAAP.
Publication Name: Journal of Accounting Research
Subject: Business
ISSN: 0021-8456
Year: 1999
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The 1993 tax-rate increase and deferred tax adjustments: a test of functional fixation
Article Abstract:
A sample of 158 deferred tax adjustments resulting from the 1993 Omnibus Budget Reconciliation Act tax-rate increase is used to text the nature and magnitude of both investors' and analysts' functional fixation on reported accounting figures. The functional fixation hypothesis (FFH) predicts a mechanical relationship between reported earnings and stock prices. Findings include the tendency of investors to impound the tax adjustment into security prices at the same rate as recurring earnings and the general omission of the tax adjustment from analysts' 1993 third-quarter earnings forecasts. A degree of functional fixation on the part of both is apparent.
Publication Name: Journal of Accounting Research
Subject: Business
ISSN: 0021-8456
Year: 2000
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The role of the manager's human capital in discretionary disclosure
Article Abstract:
A study demonstrating that managers' concerns about upcoming job performance evaluations affect their decisions regarding discretionary disclosure is presented. The research builds on previous studies indicating that unidentified costs of disclosing can preclude disclosure despite rational expectations. Disclosure costs can include threat of entry and other competitive concerns, but these need to be separated from the concerns of the individual manager. Findings include that uncertainty about performance can deter a manger from disclosing even in the presence of rational expectations.
Publication Name: Journal of Accounting Research
Subject: Business
ISSN: 0021-8456
Year: 1999
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