[This study investigates whether the accrual and funds components of earnings have incremental information content beyond earnings itself. The research design is motivated by the insight that earnings and revenues are announced in the Wall Street Journal before the annual report, which contains both accrual and funds items, is released. This allows a direct measurement of the incremental information content of the accrual and funds components of earnings which is not possible when these releases are treated contemporaneously. This study finds evidence of an association between stock returns, measured over a short interval covering the date the annual reports arrive at the SEC, and new information about the cash and noncash components of earnings released at that time. By itself, this result implies that at least one of these components has information content. After controlling for earnings, incremental information about the cash and noncash components of earnings is precisely the same.]

This study investigates whether the accrual and funds components of earnings have incremental information content beyond earnings itself. The research design is motivated by the insight that earnings and revenues are announced in the Wall Street Journal before the annual report, which contains both accrual and funds items, is released. This allows a direct measurement of the incremental information content of the accrual and funds components of earnings which is not possible when these releases are treated contemporaneously. This study finds evidence of an association between stock returns, measured over a short interval covering the date the annual reports arrive at the SEC, and new information about the cash and noncash components of earnings released at that time. By itself, this result implies that at least one of these components has Information content. After controlling for earnings, incremental information about the cash and noncash components of earnings is precisely the same.

G. Peter Wilson, Discussion Write-Offs: Manipulation or Impairment?, Journal of Accounting Research, Vol. 34, Studies on Recognition, Measurement, and Disclosure Issues in Accounting (1996), pp. 171-177

G. Peter Wilson, The Relative Information Content of Accruals and Cash Flows: Combined Evidence at the Earnings Announcement and Annual Report Release Date, Journal of Accounting Research, Vol. 24, Studies on Alternative Measures of Accounting Income (1986), pp. 165-200

Myron S. Scholes, G. Peter Wilson, Mark A. Wolfson, Firms' Responses to Anticipated Reductions in Tax Rates: The Tax Reform Act of 1986, Journal of Accounting Research, Vol. 30, Studies on Accounting and Taxation (1992), pp. 161-185

[This paper documents a positive association between firms' tendencies to access capital markets and to disclose earnings forecasts, suggesting that firms attempt to mitigate potential consequences of differential information through disclosure. Our evidence also indicates that firms financing externally are not significantly more likely to forecast in the period shortly before an offering than at other times. Therefore, while firms that issue more capital tend to issue more forecasts, forces such as legal liability deter them from more frequent forecasting around the time of an actual offering. The paper also documents that management forecasts are not systematically greater than analysts' existing expectations, or than subsequently realized earnings. The data thus suggest that to the extent firms benefit from issuing favorable earnings forecasts when offering securities, competing forces such as potential legal liability and reputation costs deter them from issuing optimistic forecasts.]

We test whether banks’ investment and financing policies can be explained by tax status. We document changes in bank holdings of municipal bonds in response to changes in tax rules relating to deductibility of interest expense. We also document an association between banks’ marginal tax rates and their investment and financing decisions, which is consistent with the existence of tax clienteles. However, banks do not sort themselves perfectly into investment and financing clienteles because of adjustment costs. We posit specific types of transaction-cost impediments to tax planning, and document that banks apparently trade off these costs against tax-planning benefits.

[We test whether banks' investment and financing policies can be explained by tax status. We document changes in bank holdings of municipal bonds in response to changes in tax rules relating to deductibility of interest expense. We also document an association between banks' marginal tax rates and their investment and financing decisions, which is consistent with the existence of tax clienteles. However, banks do not sort themselves perfectly into investment and financing clienteles because of adjustment costs. We posit specific types of transaction-cost impediments to tax planning, and document that banks apparently trade off these costs against tax-planning benefits.]

Maureen McNichols, G. Peter Wilson, Evidence of Earnings Management from the Provision for Bad Debts, Journal of Accounting Research, Vol. 26, Studies on Management's Ability and Incentives to Affect the Timing and Magnitude of Accounting Accruals (1988), pp. 1-31