In this paper, I provide two theories about why management might withhold information which is not proprietary, together with an analysis of the consequences of altering various assumptions underlying these theories. Proprietary information is considered here as any information whose disclosure potentially alters a firm's future earnings gross of senior management's compensation.' Even if a manager's private information is proprietary, shareholders may benefit occasionally from having this information disclosed (see Verrecchia [1983] and Dye [1984a]), although obvious explanations exist for the rarity of such disclosures. However, it is commonly believed that managers possess information about the firms they run, such as annual earnings' forecasts, whose release would affect the prices of their firms, but not the distribution of their firms' future

In order to express an opinion on the fairness of the presentation of the financial statements, an auditor collects evidence from a variety of sources. Much of this evidence is in the form of sample results that must be evaluated as to the level of sampling risk present (AICPA [1981, sec. 26]). Auditors often select and evaluate samples judgmentally rather than on the basis of a statistical method.' The assessment of risk, however, is a cognitively difficult task (Huber [1974, p. 434]), and often the results may be systematically biased (Tversky and Kahneman [1974]). It seems that there is a general problem of underutilizing or ignoring normatively

Research Methodology, Abnormal returns, Beta reliability, Information content

Disclosures, Voluntary disclosures, Proprietary information, Regulatory changes

This paper tests hypotheses regarding the parameters in investors' asset-demand functions. The hypothesis that federal bonds are closer substitutes for equity than for money implies “portfolio crowding out” by federal borrowing. Regression studies of asset-demand functions have needed to impose prior beliefs to obtain precise and plausible estimates for the parameters. This paper uses a MLE technique that dominates regression in that it makes full use of the constraint that the parameters are not determined arbitrarily but rather are determined by mean-variance optimization on the part of the investor. The striking conclusion is that portfolio effects are close to zero.

We study an example economy with costly labor monitoring under a wage-cum-supervision arrangement, where workers' utilities are not equalized across sectors (workers are identical to each other). Our main task is to look for (and find) a set of "flat" taxes and subsidies that bring about a Pareto improvement over the laissez-faire solution. We show that any of such welfare-improving schemes involves a tax on labor income from those workers whose utility is the lowest.

This study examines the stock price reaction around the announcement of proposed changes in long-term managerial compensation packages. The evidence indicates that on average these plans are met with positive market reactions, i.e., shareholder wealth increases. Further, we are unable to differentiate the market reaction to various types of long-range compensation schemes. This result is consistent with the notion that firms with different characteristics will resolve their managerial compensation requirements differently. Thus no particular compensation package necessarily dominates all others.

This paper presents an analysis of the audit risk consequences of PPD ex- tremeness deficiencies and miscalibration.While there is empirical evidence that auditors, like many other decision makers, assess miscalibrated PPDs , the attendant inferential risk consequences of such deficiencies have not been addressed in the extant literature.The comparative statics analysis performed in this study indicates that the risk effects of miscalibration and extremeness deficiencies on the auditor's (substantive testing) evaluation decision are complex and cannot be predicted from an examination of the planning (sampling size) decision.