Hyoong-il Oh

Abstract This paper examines whether firms that engage in corporate social responsibility activities (CSR firms) manage reported cash flows from operations (CFO) when they have strong credit market incentives. We find that CSR firms near financial distress and those having a long‐term credit rating near the investment/non‐investment grade cutoff are more likely to inflate reported CFO, compared to all other firms. We also find evidence that CSR firms with these credit market incentives appear to

Purpose The purpose of this study is to examine the relevance of American Customer Satisfaction Index (ACSI) to management voluntary forecasts of earnings. The authors further investigate whether the market reacts to such forecasts in respect of satisfaction. Design/methodology/approach The authors’ econometric models are constructed from previous work in accounting to specify the effect of ACSI on the issuance and optimism of management forecasts. Our model also specifies the impact of manageme

Abstract Research has concluded that there has been a decline in the informativeness of earnings over recent years. The reported decline has been attributed to an increasing mismatch of expenses to revenues due to the increasing expensing of investments in so‐called intangible assets to the income statement. That suggests a remedy is required and, with accounting standards boards now considering intangible asset accounting, the issue is particularly pertinent. However, his paper challenges the c

This study examines whether managers shift income-decreasing special items to discontinued operations. We expect managers to engage in this form of classification shifting because discontinued operations are reported below income before extraordinary items and discontinued operations (IBXD) on the income statement. Consistent with this expectation, we find evidence suggesting that managers classification-shift asset write-downs to discontinued operations. Furthermore, we find that classification

Considerable research has evaluated the role of accruals in determining informative earnings, with an accrual–cash flow relation at the centre of the investigation. However, much of the research is based on a misunderstanding. First, accruals are identified as the numbers that reconcile earnings to cash flows in the cash flow statement. But these are not the non‐cash accruals applied in determining earnings in the accrual accounting system; rather, they are changes in balance sheet items, most o

This study examines the effect of monetary policy uncertainty (MPU) on analyst forecast errors. We find that MPU is negatively related to analyst forecast errors for firms that are highly exposed to monetary policy. This result is driven by the component of MPU that is unrelated to economic policy uncertainty. Our findings indicate that in the context of MPU, analysts are able to reduce their forecast errors for firms that are highly exposed to monetary policy during uncertain times.

This dissertation introduces a new method for evaluating mergers and acquisitions (M&As) and goodwill allocations associated with them. This method differs from Generally Accepted Accounting Principles (GAAP), which estimate the sum of the fair value of net identifiable assets by focusing on balance sheet information, and recognizes the remainder of the purchase price as goodwill. The new method utilizes both balance sheet and income statement information to estimate the value of a target as

Abstract This study empirically estimates the date of the structural change in the aggregate earnings–returns relation and reports it as the fourth quarter of 1991. We identify three sources of the structural change: (i) an increase in the relative importance of cash flow news contained in stock returns; (ii) a decrease in the importance of discount rate news contained in aggregate earnings; and (iii) a decrease in the persistence or the predictability of aggregate earnings and returns. Next, we

In this study, we examine whether firms learn from pre‐announcement experience by focusing on optimistic pre‐announcements and market responses. Optimistic pre‐announcements are pre‐announced Earnings Per Share (EPS) higher than or equal to actual EPS. Based on organizational learning theory, we hypothesize that firms experiencing negative market responses to positive pre‐announcements (pre‐announced EPS higher than or equal to analysts' consensus) are less likely to make another pre‐announcemen