Scholars@Duke
Jennifer Francis

Jennifer Francis

Robert L. Dickens Distinguished Professor Emeritus of Business Administration
Fuqua School of Business
jfrancis@duke.edu
Box 90005, Durham, NC 27708-0120
220A Allen Building, Durham, NC 27708

Selected Publications

Payoffs to Aggressiveness

Conference Accounting Review · November 1, 2023 For a broad sample of firms, we use structural equations modeling to construct latent variables for real-action aggressiveness and reporting policy aggressiveness. We estimate the association between the latent variables and the associations of each latent ... Full text Cite

Non-random sampling and association tests on realized returns and risk proxies

Journal Article Review of Accounting Studies · June 1, 2021 This paper investigates how data requirements often encountered in archival accounting research can produce a data-restricted sample that is a non-random selection of observations from the reference sample to which the researcher wishes to generalize resul ... Full text Cite

Financial reporting for pollution reduction programs

Journal Article Management Science · December 1, 2020 We develop a conceptually grounded approach, based on the International Accounting Standards Board's conceptual framework, to the accounting for the rights and obligations embodied in a cap-and-trade program. Under this approach, firms recognize allowances ... Full text Cite

Estimation sample selection for discretionary accruals models

Journal Article Journal of Accounting and Economics · November 1, 2013 We examine how the criteria for choosing estimation samples affect the ability to detect discretionary accruals, using several variants of the Jones (1991) model. Researchers commonly estimate accruals models in cross-section, and define the estimation sam ... Full text Cite

Financial Accounting: An Introduction to Concepts, Methods and Uses

Book · November 8, 2012 Fully integrating the latest International Financial Reporting Standards, inclusive of the latest developments on Fair Value Accounting, and now more streamlined for busy students, this text provides the highest return on your financial ... ... Cite

Discussion of creating a bigger bath using the deferred tax valuation allowance

Journal Article Journal of Business Finance and Accounting · June 1, 2008 Full text Cite

Voluntary disclosure, earnings quality, and cost of capital

Journal Article Journal of Accounting Research · March 1, 2008 We investigate the relations among voluntary disclosure, earnings quality, and cost of capital. We find that firms with good earnings quality have more expansive voluntary disclosures (as proxied by a self-constructed index of coded items found in 677 firm ... Full text Cite

CEO reputation and earnings quality

Journal Article Contemporary Accounting Research · January 1, 2008 We examine the association between chief executive officer (CEO) reputation (proxied by the extent of press coverage) and the quality of the firm's earnings (proxied by two accruals-based measures). We test three explanations for an association between the ... Full text Cite

Information uncertainty and post-earnings-announcement-drift

Journal Article Journal of Business Finance and Accounting · April 1, 2007 We examine whether rational investor responses to information uncertainty (IU) explain properties of and returns to the post-earnings-announcement-drift (PEAD) trading anomaly. Consistent with a rational learning explanation, we find that: (1) unexpected e ... Full text Cite

Earnings quality

Journal Article Foundations and Trends in Accounting · December 1, 2006 This review lays out a research perspective on earnings quality. We provide an overview of alternative definitions and measures of earnings quality and a discussion of research design choices encountered in earnings quality research. Throughout, we focus o ... Full text Cite

Re-examining the effects of regulation fair disclosure using foreign listed firms to control for concurrent shocks

Journal Article Journal of Accounting and Economics · September 1, 2006 We re-examine the effects of regulation fair disclosure (Reg FD) using ADRs (who are exempt from Reg FD) to control for confounding events which affected all traded firms. Tests based on public information metrics (returns volatility, informational efficie ... Full text Cite

A returns-based representation of earnings quality

Journal Article Accounting Review · January 1, 2006 We examine the properties of a returns-based representation of earnings quality, estimated from firm-specific asset-pricing regressions augmented by an earnings quality mimicking factor. The coefficient on the earnings quality factor (the "e-loading") capt ... Full text Cite

A reexamination of the persistence of accruals and cash flows

Journal Article Journal of Accounting Research · June 1, 2005 We reexamine prior studies' conclusion that accruals are less persistent than cash, focusing on two aspects of persistence that are crucial to determining its properties. The first (time specificity) refers to the fact that persistence describes how curren ... Full text Cite

Earnings and dividend informativeness when cash flow rights are separated from voting rights

Journal Article Journal of Accounting and Economics · June 1, 2005 We contrast the informativeness of earnings and dividends for firms with dual class and single class ownership structures. Results of both across-sample tests (which explicitly control for factors influencing ownership structure and informativeness) and wi ... Full text Cite

The market pricing of accruals quality

Journal Article Journal of Accounting and Economics · June 1, 2005 We investigate whether investors price accruals quality, our proxy for the information risk associated with earnings. Measuring accruals quality (AQ) as the standard deviation of residuals from regressions relating current accruals to cash flows, we find t ... Full text Cite

Investor learning about analyst predictive ability

Journal Article Journal of Accounting and Economics · February 1, 2005 Bayesian learning implies decreasing weights on prior beliefs and increasing weights on the accuracy of the analyst's past forecast record, as the number of forecast errors comprising her forecast record (its length) increases. Consistent with this model o ... Full text Cite

Call Options and Accruals Quality

Scholarly Edition · August 2004 Cite

Costs of equity and earnings attributes

Journal Article Accounting Review · January 1, 2004 We examine the relation between the cost of equity capital and seven attributes of earnings: accrual quality, persistence, predictability, smoothness, value relevance, timeliness, and conservatism. We characterize the first four attributes as accounting-ba ... Full text Cite

The Relative and Incremental Explanatory Power of Earnings and Alternative (to Earnings) Performance Measures for Returns

Journal Article Contemporary Accounting Research · March 1, 2003 We analyze the ability of earnings and non-earnings performance metrics to explain the variability in annual stock returns for industries where we identify, ex ante, an allegedly preferred (for valuation purposes) summary performance metric. We identify th ... Full text Cite

The cost of inefficiency in US hospitals, 1985-1997.

Journal Article J Health Care Finance · 2003 We conducted a descriptive analysis of data from the Hospital Cost Report Information System from 1985 through 1997 on nonfederal, short-stay hospitals in the United States with 12-month reporting periods and valid data for the primary outcomes. The main o ... Link to item Cite

Earnings announcements and competing information

Journal Article Journal of Accounting and Economics · August 12, 2002 We investigate whether competing information, primarily analyst reports, reduces the usefulness of earnings announcements. Inconsistent with the view that information in analyst reports substitutes for earnings announcements, we find a positive relation be ... Full text Cite

Expanded disclosures and the increased usefulness of earnings announcements

Journal Article Accounting Review · January 1, 2002 We investigate three explanations for prior studies' finding that the usefulness of earnings announcements, as measured by their absolute market responses, has increased over time. We confirm this increase for a sample of 426 relatively large, stable firms ... Full text Cite

Discussion of empirical research on accounting choice

Journal Article Journal of Accounting and Economics · September 1, 2001 This discussion considers four aspects of the survey paper on empirical accounting choice research by Fields, Lys and Vincent: implications of the authors' selection of an expansive definition of accounting choice and their decision to classify this resear ... Full text Cite

Discussion of on the use of intra-industry information to improve earnings forecasts

Journal Article Journal of Business Finance and Accounting · November 1, 1999 Baber, Kim and Kumar unite and extend research on analysts' earnings forecasts (and their revisions) with research on the existence and magnitude of intra-industry information transfers. Specifically, they test whether analysts' forecast revisions appear t ... Full text Cite

Have financial statements lost their relevance?

Journal Article Journal of Accounting Research · January 1, 1999 Full text Cite

Earnings Surprises and Litigation Risk

Journal Article Journal of Financial Statement Analysis · 1998 Cite

Management communications with securities analysts

Journal Article Journal of Accounting and Economics · December 31, 1997 This paper examines the benefits from communications made at corporate presentations to securities analysts. We examine whether firms benefit by increasing analyst following or by correcting mispricing, and whether analysts gain by acquiring information th ... Full text Cite

Discussion of self-selection and analyst coverage

Journal Article Journal of Accounting Research · January 1, 1997 Full text Cite

Causes and effects of discretionary asset write-offs

Journal Article Journal of Accounting Research · January 1, 1996 Full text Cite

Agency costs and innovation some empirical evidence

Journal Article Journal of Accounting and Economics · January 1, 1995 This paper examines the empirical relation between corporate ownership structure and innovation. We test the hypothesis that diffusely-held firms are less innovative than firms with either a high concentration of management ownership or a significant equit ... Full text Cite

Shareholder Litigation and Corporate Disclosures

Journal Article Journal of Accounting Research · 1994 Cite

Discussion of Lawsuits Against Auditors

Journal Article Journal of Accounting Research · 1994 Cite

Analysts' Decisions as Products of a Multi-Task Environment

Journal Article Journal of Accounting Research · 1993 Cite

Characteristics of Hedging Firms: An Empirical Examination

Chapter · 1993 Fully illustrated pricing models, detailed formulas, and tables presenting easy-to-follow comparisons of different methods make this new book indispensable to anyone involved in today's highly volatile financial markets. ... Cite

MANAGEMENT ANTICIPATION OF INTEREST RATES: THE CASE OF COMMERCIAL BANKS

Journal Article Journal of Business Finance & Accounting · January 1, 1991 Full text Cite

Corporate Compliance with Debt Covenants

Journal Article Journal of Accounting Research · 1990 Full text Cite

COVENANTS IN U.S. PUBLIC DEBT AGREEMENTS

Journal Article Accounting & Finance · January 1, 1989 This study examines the covenants contained in a sample of 45 public debentures issued by U.S. corporations. A survey identified six covenants among the debt agreements. Interestingly, none of the sample debt issues included constraints on working capital, ... Full text Cite