Abbie J. Smith

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ibrant public securities markets rely on complex systems of supporting institutions that promote the governance of publicly traded companies. Corporate governance structures serve: 1) to ensure that minority shareholders receive reliable information about the value of firms and that a company’s managers and large shareholders do not cheat them out of the(More)
We posit that limited transparency of firms’ operations to outside investors increases demands on governance systems to alleviate moral hazard problems. We investigate how ownership concentration, directors’ and executive’s incentives, and board structure vary with: (1) earnings timeliness, and (2) organizational complexity measured as geographic and/or(More)
Motivated by extant finance theory predicting that insider trading crowds out private information acquisition by outsiders, we use data for 100 countries for the years 1987 to 2000 to study whether analyst following in a country increases following restriction of insider trading activities. We document that analyst following increases after initial(More)
This paper explores direct relations between corporate investment behavior and the timeliness of accounting recognition of economic losses (TLR) reflected in a country’s accounting regime. We explicitly investigate the extent to which TLR plays a role in disciplining the investment decisions of firm managers. Building on the idea that asymmetric(More)
A large empirical literature in accounting, economics and finance studies the relation between corporate investment and internally generated cash flows to test for the existence and significance of financing constraints. In this paper, we argue that much of the extant literature confounds the notion of cash flow with accrual accounting net income, which by(More)
In this paper we study the relation between the properties of firms’ financial reporting systems and the incentives for managers to pre-empt the financial reports by volunteering private information as it is obtained. We show that preemptive disclosures will be made only if the accounting system is not too conservative. The key implication of these findings(More)
International harmonization of accounting standards appears to be inevitable. However, little evidence exists regarding whether harmonizing accounting standards will result in actual harmonization of accounting practices. Using a sample of non-US firms that adopt US GAAP to provide evidence on this issue, we find that most firms that adopt US GAAP adjust(More)
We examine the effect of financial reporting quality on the trade-off between monitoring mechanisms used by lenders. We rely on Sarbanes-Oxley internal control reports to measure financial reporting quality. We find that when a firm experiences a material internal control weakness, lenders decrease their use of financial covenants and financial-ratio-based(More)
In this study we use a sample of petroleum refining firms to examine whether earnings sensitivity measures are risk-relevant. Because actual earnings sensitivity measures as per the SEC’s new market risk disclosure rules are either unavailable, incomplete or cross-sectionally uncomparable at the present time, we construct earnings sensitivity measures from(More)