How Corporate Managers Think about Forward-Looking Guidance

Headlines during earnings season often focus on the forward-looking guidance corporate managers provide. Yet, questions remain about managers’ perceptions of the guidance process and the tradeoffs they face in deciding whether and what to guide. To gain greater insight, we surveyed 357 managers at publicly listed corporations and conducted nine in-depth interviews.

Our survey sheds light on the critical role guidance plays during earnings season. Because analysts and investors dislike surprises, our respondents said guidance provides an effective channel to manage expectations. Around earnings announcements, corporate managers commonly meet privately with analysts and investors after conference calls. Our respondents said … Read more

Financial Enforcement Actions and the Role of Whistleblowers

In our recent paper, we investigate the association between employee whistleblowers and outcomes of financial misrepresentation enforcement actions by the Securities and Exchange Commission (SEC) and Department of Justice (DOJ).  We examine SEC and DOJ enforcement actions for financial misrepresentation since the passage of the Sarbanes-Oxley Act of 2002 and study whether whistleblower involvement in regulatory enforcement is related to more severe (1) financial penalties levied against misrepresentation firms, (2) monetary penalties assessed against executives associated with the misconduct, or (3) prison sentences of employee respondents. We also explore the relation between whistleblowers and penalties imposed on third‐party respondents (e.g., … Read more