When More Or Less Is Less: <i>Managers’ Clichés</i>

Klevak, Julia; Livnat, Joshua; Suslava, Kate

doi:10.3905/jfds.2019.1.3.057

Cited by 3 publications

(1 citation statement)

References 9 publications

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“…NLP studies in accounting use three main methods to extract textual disclosures from corporate filings. Under the dictionary method, researchers count the number of positive/negative words (Feldman, Govindaraj, Livnat, and Segal 2010;Loughran and McDonald 2011), certain idioms (Klevak, Livnat, and Suslava 2019;Suslava 2021), or business keywords (Henry 2006).…”

Section: Extraction Of Textual Characteristics Of Cam Disclosuresmentioning

confidence: 99%

Critical Audit Matters: Possible Market Misinterpretation

Klevak

Livnat

Pei

et al. 2023

Auditing: A Journal of Practice &Amp; Theory

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The Public Company Accounting Oversight Board (PCAOB) recently expanded audit reports to disclose Critical Audit Matters (CAMs) and the audit procedures used to address them. We study the first wave of CAM disclosers from July 2019 to May 2020, which included large accelerated filers reporting on their 2019 fiscal year results. We examine whether market participants erroneously perceive firms with more extensive CAM disclosures to be riskier than firms with less extensive CAM disclosures. We find that firms with more extensive CAM disclosures are associated with increased perceived uncertainty: stock prices of these firms are significantly more volatile and analysts’ forecasts are significantly more dispersed than those of firms with less extensive CAM disclosures.

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