Was the Sarbanes-Oxley Act Good News for Corporate Bondholders?

2011 ◽  
Vol 25 (3) ◽  
pp. 465-485 ◽  
Author(s):  
Mark L. DeFond ◽  
Mingyi Hung ◽  
Emre Carr ◽  
Jieying Zhang
Keyword(s):  
Market Reaction ◽  
Bond Market ◽  
Significant Decline ◽  
Bad News ◽  
Good News ◽  
Primary Analysis ◽  
Cross Sectional ◽  
Sarbanes Oxley ◽  
The Impact ◽  
Bondholder Value

SYNOPSIS We investigate the impact of the Sarbanes-Oxley Act (SOX) on corporate bondholder value by examining the bond market reaction to news events leading up to the passage of SOX. The net impact of SOX on bondholder value is difficult to predict, and there are many reasons why it may be viewed as either good or bad news. Our primary analysis reveals a significant decline in average bondholder value around these events. In addition, cross-sectional tests find that the decline is significantly larger among riskier bonds and among bonds held by firms that are expected to experience the greatest changes under SOX. Thus, our findings are consistent with the bond market expecting the exogenously imposed changes under SOX to make bondholders worse off.

The future of the management of projects in the 2030s

2019 ◽  
Vol 12 (2) ◽  
pp. 242-266 ◽  
Author(s):  
Derek Walker ◽  
Beverley Lloyd-Walker
Keyword(s):  
Project Managers ◽  
Bad News ◽  
Good News ◽  
Workplace Environment ◽  
Content Type ◽  
Routine Work ◽  
The Future ◽  
Management Project ◽  
The Uk ◽  
The Impact

Purpose The purpose of this paper is to explore recent literature on the impact of changes in the workplace environment and projected trends through to the year 2030. This allows the authors to identify and discuss what key trends are changing the nature of project organising work. The authors aim to identify what knowledge and which skills, attributes and experiences will be most likely valued and needed in 2030. Design/methodology/approach This paper is essentially a reflective review and is explorative in nature. The authors focus on several recent reports published in the UK and Australia that discuss the way that the future workforce will adapt and prepare for radical changes in the workplace environment. The authors focus on project organising work and the changing workplace knowledge, skills, attributes and experience (KSAE) needs of those working in project teams in 2030 and beyond. The authors draw upon existing KSAE literature including findings from a study undertaken into the KSAEs of project alliance managers working in a highly collaborative form of project delivery. Findings The analysis suggests that there is good and bad news about project workers prospects in 2030. The good news is that for those working in non-routine roles their work will be more interesting and rewarding than is the case for today. The bad news is that for workers in routine work roles, they will be replaced by advanced digital technology. Research limitations/implications Few, if any, papers published in the project organising literature speculate about what this discipline may look like or what KSAEs will be valued and needed. Practical implications This paper opens up a debate about how project management/project organising work will be undertaken in future and what skills and expertise will be required. It also prompts project managers to think about how they will craft their careers in 2030 in response to expected work environment demands. This will have professional and learning implications. Social implications The issue of the future workplace environment is highly relevant to the social context. Originality/value This paper is about a projected future some 12 years onward from today. It bridges a gap in any future debate about how project organising jobs may change and how they will be delivered in the 2030s.

“Stiff Business Headwinds and Uncharted Economic Waters”: The Use of Euphemisms in Earnings Conference Calls

2021 ◽  
Author(s):  
Kate Suslava
Keyword(s):  
Market Reaction ◽  
Abnormal Returns ◽  
Bad News ◽  
Conference Calls ◽  
Investor Attention ◽  
Earnings Announcement ◽  
Negatively Associated ◽  
The Impact

This paper studies whether euphemisms obfuscate the content of earnings conference calls and cause investors to underreact. I argue that managers’ use of euphemisms can alleviate the impact of bad news and delay the market reaction to adverse information. Using a dictionary of corporate euphemisms, I find that their use by managers—but not by analysts—is negatively associated with both immediate and future abnormal returns, and their frequency moderates the negative market reaction to bad earnings news. Finally, stock underreaction is more pronounced on busy earnings announcement dates, when investor attention is distracted. This paper was accepted by Brian Bushee, accounting.

scholarly journals Volatility of Regional Sharia Compliance Returns and US News Impact

2018 ◽  
Vol III (I) ◽  
pp. 294-307
Author(s):  
Kashif Hamid ◽  
Rana Shahid Imdad Akash ◽  
Muhammad Mudasar Ghafoor
Keyword(s):  
Bad News ◽  
Portfolio Diversification ◽  
Good News ◽  
Stock Index ◽  
Leverage Effect ◽  
Pricing Models ◽  
Stock Indices ◽  
Long Run ◽  
Daily Data ◽  
The Impact

Investigation of the impact of US News proxy on the returns of regional sharia compliance indices and volatility is the primary aim of this study. The daily data of Dow Jones Islamic index (DJII), Jakarata Islamic Index (JKII), Karachi Meezan Islamic Index (KMI) and Standard & Poor 500 stock index has been taken for the period of July 01, 2013 to June 30, 2018. GARCH (1,1) is extended with US News proxy for KMI, DJII and JKII. US news proxy identifies that leverage effect reveal the long run persistency in volatility. EGARCH (1,1) model indicates that higher volatility has bee also increased by bad news than good news due to leverage effect in sharia compliance returns. This study leads to extend various assets pricing models by modeling the volatility and will also inform the international and regional investors about the new trends of investment in Islamic stock indices and portfolio diversification.

scholarly journals Impact of allergic rhinitis on the day-to-day lives of children: insights from an Australian cross-sectional study

BMJ Open ◽  
2020 ◽  
Vol 10 (11) ◽  
pp. e038870
Author(s):  
Sinthia Bosnic-Anticevich ◽  
Peter Smith ◽  
Michael Abramson ◽  
Charlotte Mary Hespe ◽  
Menai Johnson ◽  
...  
Keyword(s):  
Allergic Rhinitis ◽  
Health Status ◽  
Symptom Control ◽  
Mean Difference ◽  
Assessment Tools ◽  
Primary Analysis ◽  
Online Questionnaire ◽  
Cross Sectional ◽  
Perceived Burden ◽  
The Impact

Study design and objectiveCross-sectional, observational survey to describe the impact of allergic rhinitis (AR) on Australian children (2 to 15 years).MethodsParticipants (n=1541), parents of children aged 2 to 15 years, provided information on behalf of themselves and one eligible child in their household using a custom-built online questionnaire. Children were allocated to case (AR) or control (No AR) analysis groups based on a validated screening questionnaire.Statistical methodsThe study sample was stratified on age: primary analysis population (6 to 15 years, n=1111; AR=797, No AR=314); exploratory population (2 to 5 years). The primary endpoint, parent-perceived burden, was quantified using a validated measure of health status and analysed via comparison of means.ResultsThe majority of AR cases were treated (730/797; 90.3%) and classified as having moderate-severe, intermittent AR (549/797; 68.9%). Half reported adequate symptom control in the prior 2 weeks (389/797; 48.8%; OR=4.04; 95% CI (CI) 2.24 to 7.31). Having AR was associated with worse overall health status (7.4 vs 8.4, mean difference (least squares mean difference (LSMD))=−0.99; 95% CI −1.18 to −0.79), fewer days being happy (22.2 vs 25.9, LSMD=−3.68; 95% CI −4.82 to −2.54) and more days of poor physical (2.82 vs 0.78, LSMD=2.04; 95% CI 1.61 to 2.47) and emotional (2.14 vs 0.67, LSMD=1.47; 95% CI 1.02 to −1.92) health compared with not having AR. All of these outcomes were significantly (p<0.05) worse in children who reported inadequate symptom control. Having AR negatively impacted on schoolwork, sleep and other activities, and increased the likelihood of having comorbidities.ConclusionThe parent-perceived burden of AR in Australian children is high and it impacts many areas of day-to-day living. Inadequate symptom control is a key driver of the extent of this impact. Opportunities to optimise the management of AR in children include the adoption of self-assessment tools to gauge and monitor adequacy of symptom control.

The Unintended Consequences of Sarbanes-Oxley on Technology Innovation and Supply Chain Integration

2007 ◽  
Vol 4 (1) ◽  
pp. 103-121 ◽  
Author(s):  
Vicky Arnold ◽  
Tanya S. Benford ◽  
Joseph Canada ◽  
John R. Kuhn ◽  
Steve G. Sutton
Keyword(s):  
Supply Chain ◽  
Internal Control ◽  
Study Data ◽  
Unintended Consequences ◽  
Production Cycle ◽  
Cross Sectional ◽  
Sarbanes Oxley ◽  
Structural Inertia ◽  
Management Approaches ◽  
The Impact

This paper reports the results of a series of case studies conducted to explore the impact of the Sarbanes-Oxley Act of 2002 on the performance of small and medium-sized enterprises (SMEs). This issue is critical as the SEC and the PCAOB continue to defend the requirement that SMEs adhere to the internal control reporting requirements of Section 404 in the Act, albeit at a revised level of expectation focusing on more of a top-down risk-based approach. Cross-sectional case study data is used to explore the impacts of SOX on SMEs adopting organizational theories as a lens for observing behavior and outcomes. The results of the study confirm that there are both benefits and costs associated with SOX compliance. All of the organizations studied experienced substantial improvements in enterprise risk management approaches. However, the level of difficulty experienced by the various organizations in implementing SOX requirements was highly variable and could be traced back to the underlying factors in structural inertia theory: size, complexity, experience with change, experience with strict controls, and adaptability. Perhaps the most important finding is that SOX does impact organizational flexibility to various degrees as predicted by theory; and this impact can in turn affect production cycle times, information technology investment, supply chain performance, and ultimately, market competitiveness.

Investor sentiment and timely loss recognition

2018 ◽  
Vol 17 (3) ◽  
pp. 383-404
Author(s):  
Hong Kim Duong ◽  
Michael Schuldt ◽  
Giorgio Gotti
Keyword(s):  
Financial Analysts ◽  
Investor Sentiment ◽  
Bad News ◽  
Corporate Disclosure ◽  
Primary Analysis ◽  
Firm Level ◽  
Content Type ◽  
Abnormal Accruals ◽  
The Impact ◽  
Timely Loss Recognition

Purpose The purpose of this paper is to investigate the impact of investor sentiment on timely loss recognition by examining a sample of firms for the period 1988-2015. Design/methodology/approach The authors use the accruals-based model of Ball and Shivakumar (2005) and a sentiment measure in their primary analysis. Supporting analyses include an extension of Simpson (2013) using an abnormal accruals analysis with subsamples of firms with bad news, the use of a Khan and Watts (2009) quarter firm-level measure of conservatism and an investigation of the monitoring role played by financial analysts. Findings The study finds that managers strategically report more losses in high sentiment periods than in low sentiment periods. This loss timing behavior results in an average 37.8 per cent increase in the acceleration of loss recognition. This study additionally finds a negative correlation between investor sentiment and abnormal accruals when managers are reporting bad news, and that a greater number of financial analysts following a firm curtails managers’ acceleration of loss recognition in high sentiment periods. Originality/value This study contributes to the corporate disclosure literature by showing that managers strategically recognize losses, and such behavior is more prevalent in high sentiment periods. Managers take advantage of prevailing investor sentiment to accelerate losses in high sentiment periods to mitigate market penalties from reporting bad news.

scholarly journals Institutional Investment Constraints and Stock Prices

2017 ◽  
Vol 52 (2) ◽  
pp. 465-489 ◽  
Author(s):  
Jie Cao ◽  
Bing Han ◽  
Qinghai Wang
Keyword(s):  
Portfolio Management ◽  
Stock Prices ◽  
Stock Price ◽  
Bad News ◽  
Good News ◽  
Stock Return Predictability ◽  
Institutional Investment ◽  
Price Momentum ◽  
The Impact ◽  
Investment Constraints

We test the hypothesis that investment constraints in delegated portfolio management may distort demand for stocks, leading to price underreaction to news and stock return predictability. We find that institutions tend not to buy more of a stock with good news that they already overweight; they are reluctant to sell a stock with bad news that they already underweight. Stocks with good news overweighted by institutions subsequently significantly outperform stocks with bad news underweighted by institutions. The impact of institutional investment constraints sheds new light on asset pricing anomalies such as stock price momentum and post–earnings announcement drift.

To test or not to test: what is the value of knowing?

2014 ◽  
Vol 2 (1) ◽  
pp. 114
Author(s):  
John Rizzo ◽  
David Lee
Keyword(s):  
Willingness To Pay ◽  
Loss Aversion ◽  
Disease Risk ◽  
Disease Onset ◽  
Onset Time ◽  
Bad News ◽  
Good News ◽  
Positive Test ◽  
Test Accuracy ◽  
The Impact

This paper develops a conceptual model for understanding the impact of the “value of knowing”, defined as the value of information from medical tests exclusive of treatment or life-planning decisions on a patient’s decision to undergo testing.  We draw upon the behavioral economic, loss-aversion, cost-benefit and willingness-to-pay literatures to develop a mathematical model of how a medical diagnostic test affects patients’ sense of wellbeing and how this phenomenon affects their decision to undergo testing.  The model allows simultaneous evaluation of the impact of baseline (pre-test) disease risk, test inaccuracy, prior information, worrying over disease onset, time preference and the degree of loss aversion on patients’ net assessment of the value of knowing.  We then simulate the net value of knowing under alternative hypothetical scenarios about test accuracy and patient characteristics.              Patients agree to testing when the expected benefits from good news (measured by willingness to pay) exceed the psychic costs of bad news (measured by willingness to accept).  The value of knowing from testing is shown to depend on test accuracy, pre-test disease risk, the patient’s discount rate, time to disease onset and the patient’s aversion to receiving bad news (loss).  Simulation results indicate that the value of knowing increases (and testing becomes more likely) when: tests are more accurate; the baseline expectation of a positive test is low and the adverse consequences of a positive test are either small or occur far in the future or patients do not worry about onset of future disease.

The impact of New Zealand's disclosure reform on differential managerial disclosure behaviour for good news versus bad news firms

2011 ◽  
Vol 23 (3) ◽  
pp. 224-261 ◽  
Author(s):  
Alastair Marsden ◽  
Russell Poskitt ◽  
Yinjian Wang
Keyword(s):  
Bad News ◽  
Good News ◽  
The Impact
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