The Effect of Fundamental Risk on the Market Pricing of Accruals Quality
Auditing and Finance | Volume 23| Issue 4 | Section 1
Linda H. Chen | University of Arizona
Dan S. Dhaliway | University of Arizona
Mark A. Trombley | University of ArizonaÂ
This study concluded that there was no relationship between accrual quality and cost of capital as measured by future return realizations for the firms with the lowest risk, however, firms with the highest risk showed a strong relationship between accrual quality and future return realizations. The authors also concluded that as fundamental risk increases, accrual quality has an increasing effect on cost of capital and that the effect of accrual quality on cost of capital is not as large for firms with low fundamental risk.
*****
Earnings Restatements, the Sarbanes-Oxley Act, and the Disciplining of Chief Financial Officers
Auditing and Finance | Volume 24| Issue 1 | Section 1
Denton Collins| Texas Tech University
Adi Masli | University of Arkansas
Austin L. Reitenga | University of Alabama
Juan Manuel Sanchez | University of Arkansas
The authors examined whether CFO turnover and CFO labor market penalties associated with earnings restatements have increased after the implementation of SOX. Their research indicates that CFOs are more likely to be terminated if their firm has to restate earnings and they do face a severe labor market penalty after the incident. However, the findings do not support that the implementation of SOX has significantly impacted CFO turnover rates. This leads observers to believe that SOX isn’t impacting corporate governance. However, the authors do point out that the market penalties imposed on CFOs is much higher post-SOX.
*****
The impact of mergers and acquisitions on corporate performance in India
Management Decision | Volume 46 | Issue 10 | Section 1Satish Kumar | Fore School of Management
Lalit K. Bansal | Punjab University
Professors Kumar and Bansal’s paper focused on the impact of mergers over the longer-term and found that synergies were realized over a long horizon.  However, it appears that increased leverage and working capital are needed to achieve the pre-deal synergies. The study highlights that achieving synergies are not guaranteed and the cost to achieve synergies are very material and take years to fully realize.
*****
Volume and Price Patterns Around a Stock’s 52-Week Highs and Lows: Theory and Evidence
Management Science | Volume 55 | Issue 1
Steven Huddart | Pennsylvania State University
Mark Lang | University of North Carolina
Michelle H. Yetman | University of CaliforniaÂ
In this study, the authors concluded that extreme prices in a stock’s past price path affect investors’ trading decisions in equity markets. They also concluded that stocks breaking outside of their prior trading range appear to earn positive excess returns after the event. In addition, historical trading volumes impacted the extreme stock price primarily among small investors.   Â
*****
Masters of War: Rivals’ Product Innovation and New Advertising in Mature Product Markets
Management Science | Volume 55 | Issue 2
Andrea Fosfuri | Universidad Carlos III de Madrid
Marco S. Giarratana | Universidad Carlos III de MadridÂ
Professors Fosfuri and Professor Giarratana found that rivals’ product announcements have a bigger negative impact on a firm’s financial market value when product newness is limited. In addition, they also found that new filed trademarks decrease a firm’s financial market value. The most startling finding was that new advertising positively impacts competitors’ financial market value through an increase in the overall demand.
Add this page to your favorite Social Bookmarking websites
Hits : 278
