Prior work documents that managers increase the quantity of earnings guidance provided after exogenously losing coverage from an equity analyst. I examine how analysts influence guidance quality. I find that following an exogenous reduction in analyst coverage, managers issue earnings guidance that is lower quality (i.e., it is less accurate). This result varies predictably based on managers’ incentives, features of the firm’s analyst coverage, and the presence of other intermediaries. Overall, my findings identify a situation in which guidance quantity and quality move in divergent directions and highlight that analysts can be an important determinant of voluntary disclosure quality.

Using Census microdata on 28,000 manufacturing plants, we examine how firms manage employee retention concerns. In response to reductions in the local unemployment rate, plants take additional steps beyond increasing compensation. First, plants adjust bonus architecture to ensure bonuses can be paid. Second, plants offer more agency to employees by deploying high-involvement work practices that generate longer-term commitment. Third, plants pull these retention levers less when they have high availability and use of data as this reduces the adverse effects of employee turnover on organizational knowledge. These results are robust to using the fracking revolution as a shock increasing firms’ retention concerns. Additionally, we observe that although compensation increases tend to spill over to other plants within the same firm—aligning with theories of inequity aversion—adjustments to bonus architecture and the provision of employee agency do not, suggesting these may be more cost-effective strategies for multiplant firms.

This study aims to understand international rotations (“secondments”) as a brokerage mechanism within globally networked public accounting firms (GNFs). Through interviews with 29 secondees on tour to or from the U.S. (individuals on rotation from one member firm to another member firm in a specified role for a fixed period) and 11 firm leaders, we find that secondments are viewed as a critical brokerage function in performing global client service and global risk management. Specifically, secondees bridge gaps in the GNF structure by brokering network ties, technical knowledge, sociocultural knowledge, and language. Secondees embody different brokerage roles and can fulfill more than one brokerage role at a time, depending on the purpose of the secondment and the stage of deployment. Collectively, secondments are important mechanisms by which structural holes are reduced between participating member firms and proximal member firms, ultimately benefiting the global firm and the global clients they serve.

We examine the relation between debt contract renegotiation costs and contract design. We use a plausibly exogenous shock to expected renegotiation costs arising from a change in the taxation of debt renegotiations to show that, as renegotiation costs decline, the maturity of debt contracts lengthens, the initial likelihood of covenant violation increases, and the use of performance pricing provisions becomes less frequent. The evidence indicates that ex ante allocation of cash flow rights and ex post reallocation of decision rights through renegotiation are local substitutes, where the preference for one mechanism versus the other depends, at least in part, on renegotiation costs. Data Availability: Data are available from the public sources cited in the text.

This research evaluates whether reporting incentives and consequences change under the new lease accounting standard. Under prior guidance (SFAS 13), we predict and find firms with high financing cost sensitivities to leverage have greater incentive to finance investments with operating leases. Under the new lease accounting standard (ASU 2016-02), we predict and find this leverage incentive remains but is reduced, consistent with the FASB’s objective to limit opportunities to structure lease contracts for balance sheet purposes. Under ASU 2016-02, we also predict and find that the leverage incentive encourages firms to reduce operating lease liabilities by decreasing the duration of minimum lease payments. Lastly, we predict and find that firms use fewer operating leases under both SFAS 13 and ASU 2016-02 when managers’ income objectives exclude depreciation and/or interest expense. These findings suggest reporting incentives remain post ASU 2016-02 that encourage firms to structure leases to achieve accounting outcomes. Data Availability: This study uses licensed data from a variety of sources (see Appendix A for a detailed list of providers).

Global markets are moving toward requiring firms to track and report greenhouse gas emissions across their value chain. This includes self-generated emissions (i.e., Scope 1), emissions from power providers (i.e., Scope 2), and emissions from upstream suppliers and downstream parties (i.e., Scope 3). Yet, obtaining reliable emissions data is a complex task that often relies on cumbersome legacy processes and becomes especially challenging with upstream and downstream emissions. Using the Design Science Research Methodology, we propose and prototype (early-stage) a technological solution that uses blockchain, non-fungible tokens, and smart contracts to track and report greenhouse gas emissions across a firm’s value chain. The proposed model demonstrates how these tools can create a reliable classification and provenance of emissions that all value chain members can access for reporting purposes. Experts in the field evaluate the proposed model, find it technologically feasible, and call attention to some of its challenges.

Employees’ skill development is key to organizations’ competitiveness in a global, knowledge-based economy. Prior research in accounting, however, has mainly focused on motivating the provision of transitory effort. This study investigates how relative performance information (RPI) as a management control influences employees’ willingness to engage in skill development and whether the effect of RPI depends on whether employees face a tradeoff between training and current work performance. We predict and find that RPI increases the likelihood of taking training when a work-training tradeoff is absent but decreases it when a work-training tradeoff is present. We also predict and find RPI increases employee performance when a work-training tradeoff is absent and the effect is less positive (and directionally negative) when a work-training tradeoff is present. Our paper is an important first step in investigating how management controls interfere with employees’ investment in skill development and its tradeoff with transitory effort provision. Data Availability: Data are available upon request.

Performance-contingent cash and tangible rewards are commonly used to motivate employees, and the taxation of such rewards is unavoidable. We use two experiments to examine how the effect of reward taxation on employee effort varies by reward type. In Experiment 1, we find reward taxation decreases positive affect, increases negative affect, and decreases reward attractiveness for employees when rewards are tangible, but not when rewards are cash. In Experiment 2, we find reward taxation reduces employee effort when rewards are tangible, but not when rewards are cash. Collectively, this evidence advances knowledge at the intersection of tax and management accounting by explaining why reward type alters the effect of reward taxation on employee effort. Moreover, our experimental results inform managers of a potential downside to using tangible rewards to motivate employees. Data Availability: Authors will make data available on request.

We examine the role of investor relations (IR) in private debt markets. We find that firms with dedicated IR officers (IROs) receive significantly lower loan spreads, particularly when lenders require a better understanding of the borrower’s risk profile. Among firms with IROs, those with longer tenured officers experience lower spreads, especially when IROs also manage financial responsibilities. To address endogeneity concerns, we demonstrate that loan spreads decline when a firm establishes an IR program and rise when the program is discontinued. Furthermore, when a different individual assumes the IRO role, loan spreads increase, even though there are no reductions in firm disclosure. Loans issued to firms with IROs also have shorter syndication duration, attract more nonrelationship, foreign, and nonbank participant lenders, feature more customized covenants, and are less likely to undergo renegotiation. Overall, our study provides robust evidence of the relevance of IR in private debt markets.

We describe variation in the reporting quality (i.e., accuracy and bias of reported net asset values (NAVs)) of private equity (PE) funds across types of external monitors (investors and auditors) and third-party service providers (valuation specialists, marketers, and administrators). In contrast to public markets, we find only limited evidence that reporting quality varies with the composition and types of investors in PE funds. We observe, however, that reporting quality varies with auditor involvement and the use of third-party service providers; these associations often differ across buyout (BO) and venture capital (VC) funds and from those observed in public markets. Our evidence is important to investors and regulators, especially now that PE supersedes public markets as the main vehicle to raise capital and as regulators increase their focus on private markets. Data Availability: Data used in this study are available from public sources listed in the paper.