Bushee et al. (J. Accounting Econom. 34 (2003) 149–180) is a timely study in an area—corporate disclosure policy—that is increasingly important to regulators, corporate managers, and academics. The authors report several results that will be of interest to these groups. I describe the corporate disclosure issues that make the authors’ research questions of broader relevance than their specific topic might suggest. I then provide comments on theoretical and empirical aspects of the study. Overall, the study is likely to be useful in helping us understand some of the forces at work as corporate disclosure becomes more rapid, more comprehensive, and more open.

Ittner, Lambert, and Larcker (J. Accounting Economics (2003) this issue) present compelling evidence that new economy firms rely more on stock-based compensation than do old economy firms, based on 1998 and 1999 data from a proprietary sample of companies. I complement the ILL results by analyzing data over a longer time period (1992–2001) and, more importantly, document the effect of the 2000 market crash on stock-based pay in new economy firms. Finally, I offer evidence supporting the conjecture that differences in pay practices between new and old economy firms reflect accounting considerations, perceived costs, and competitive inertia.

This paper reassesses evidence of anticipatory income smoothing reported in DeFond and Park (DP) (J. Accounting Econom. 23 (1997) 115) in light of knowledge about measurement error in discretionary accrual estimates. We argue that the method DP use to measure un-managed earnings mechanically biases the evidence in a manner consistent with anticipatory income smoothing. Using an approximate randomization approach, we find that DP's results cannot be distinguished from those achieved when discretionary accruals are randomly assigned to firm-years in our sample. Overall, these results show that the ‘backing out’ approach to measuring un-managed earnings is ineffective in testing earnings management hypotheses.

We examine repricing activity surrounding the FASB's 1998 announcement regarding accounting for repriced options. We find that repricing increases during, and decreases after, the 12-day window between the announcement and proposed effective dates, consistent with firms timing repricings to avoid recording an expense. We find that firms experiencing increasing earnings patterns, firms with earnings around zero, and growth firms are more likely to reprice in the window, but having repriced recently decreases the likelihood of doing so. The evidence suggests that firms trade off financial reporting benefits against reputation costs in decisions to time repricings to get favorable accounting treatment.

Recent advances in information technology allow firms to provide broader access to their disclosures. We examine the determinants and effects of the decision to provide unlimited real-time access to conference calls (i.e., “open” conference calls). Our evidence suggests that the decision to provide open calls is associated with the composition of a firm's investor base and, to some degree, the complexity of its financial information. We also find that open calls are associated with a greater increase in small trades (consistent with individuals trading on information released during the call) and higher price volatility during the call period.

We investigate whether corporate executives’ stock repurchase decisions are affected by their incentives to manage diluted earning per share (EPS). We find that executives increase the level of their firms’ stock repurchases when: (1) the dilutive effect of outstanding employee stock options (ESOs) on diluted EPS increases, and (2) earnings are below the level required to achieve the desired rate of EPS growth. We also find that executives’ repurchase decisions are not associated with actual ESO exercises, suggesting that they are driven by incentives to manage diluted but not basic EPS, and strengthening our earnings management interpretation.