A large body of research is devoted to understanding the causes and consequences of firms' adoption of internationally recognized accounting standards. Thus far, researchers' attention has focused almost exclusively on the informational benefits of the adoption. We extend the existing literature by offering a different, stewardship perspective. We hypothesize that the voluntary adoption of international accounting standards is associated with changes in the firm's internal performance evaluation process; in particular, it is associated with increases in the sensitivities of CEO turnover and employee layoffs to accounting earnings. Our results are consistent with these predictions.

We investigate the effects of mergers on the career outcomes of financial analysts. We hypothesize and find that analysts with good earnings forecast performance experience higher turnover during mergers, target analysts are more likely to turnover and the existence of a competing analyst in a merger counter party also increases analyst turnover. We analyze the promotion of analysts to research executive positions and find that analysts with greater experience and especially experienced stars are more likely to be promoted. Finally, we document that analyst turnover is associated with decreases in research quality at the merged firms post-merger.

This paper provides evidence about the unintended consequences arising when small companies are exempted from costly regulations—these firms have incentives to stay small. Between 2003 and 2008, the SEC postponed compliance with Section 404 of the Sarbanes‐Oxley Act of 2002 (SOX) for “non‐accelerated filers” (firms with public float less than $75 million). We hypothesize and find that some of these firms had an incentive to remain below this bright line threshold. Moreover, we document that these firms remained small by undertaking less investment, making more cash payouts to shareholders, reducing the number of shares held by non‐affiliates, making more bad news disclosures, and reporting lower earnings than control firms. Finally, there is no evidence that firms remaining small are doing so to maintain insiders' private control benefits. These findings have implications beyond SOX because numerous federal and state regulations exempt small firms via bright line size thresholds.