Charlie Wasley

Bio

Previously on the faculty of Washington University in St. Louis.

Teaching Interests

Corporate financial reporting.

Research Interests

The role of accounting information in capital markets which encompasses: the rational pricing of firm-level earnings, components; the information content of aggregate earnings for macroeconomic measures such as aggregate market returns and GDP; measuring real activity management; management guidance and earnings asymmetric timeliness; demand for management guidance in the bond market; consequences of earnings guidance cessation; information externalities in capital markets; and econometric and methodological issues in accounting research.

Professional History

Full Professor

University of Rochester Simon Business School

September 2016 -

Clinical Professor Joseph and Janice Willett Distinguished Scholar; Area Coordinator, Accounting

University of Rochester Simon School of Business, Rochester NY

July 2009 - September 2016

Associate Professor of Accounting, Joseph and Janice Willett Distinguished Scholar; Area Coordinator

University of Rochester Simon School of Business, Rochester NY

July 2007 - June 2009

Associate Professor of Accounting, Area Coordinator

University of Rochester Simon School of Business, Rochester NY

2001 - 2007

Visiting Research Associate Professor of Accounting

University of Rochester Simon School of Business, Rochester NY

1999 - 2001

Associate Professor of Accounting

University of Iowa, Iowa City, Iowa

1997 - 2001

Visiting Associate Professor of Accounting

University of Iowa, Iowa City, Iowa

1996 - 1997

Assistant Professor of Accounting

Washington University In St. Louis, St. Louis MO

1987 - 1996

Education

University of Iowa - 1987

Ph D

Accounting

SUNY at Binghamton - 1982

MS

Accounting

SUNY at Binghamton - 1981

BS

Business Administration

Publications

2016

The Disclose or Abstain Incentive to Issue Management Guidance

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Journal of Law, Finance, and Accounting.

Volume: 1

Issue: 1

Download the PDF: http://www.simon.rochester.edu/faculty_research_pdf/charles.wasley/intellcont/LWZ Mar 17 2015-1.docx

Visit the website: https://www.nowpublishers.com/article/Details/LFA-0001

2016

Mactoeconomic Uncertainty and Management Earnings Forecasts

Journal/Publisher/Proceedings Publisher: Accounting Horizons

Volume: 30

Issue: 1

Visit the website: http://aaajournals.org/doi/full/10.2308/acch-51311?=

2014

Macroeconomic uncertainty and management earnings forecasts

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Accounting Horizons

2014

The disclose or abstain incentive to issue management guidance

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Journal of Law, Finance, and Accounting, Forthcoming

2013

Aggregate uncertainty and the issuance of management earnings forecasts

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Working paper, Rochester University

2013

Soft-Talk Management Cash Flow Forecasts: Bias, Quality, and Stock Price Effects*

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Contemporary Accounting Research

Volume: 30

Issue: 2

2011

Information Externalities along the Supply Chain: The Economic Determinants of Suppliers'' Stock Price Reaction to Their Major Customers'' Earnings Announcements

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Contemporary Accounting Research

Issue: Winter 2011

2011

Information Externalities along the Supply Chain: The Economic Determinants of Suppliers’ Stock Price Reaction to Their Customers’ Earnings Announcements*

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Contemporary Accounting Research

Volume: 28

Issue: 4

2011

The Effect of R&D Inputs and Outputs on the Relation between Uncertainty of Future Operating Performance and R&D Expenditures

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Journal of Accounting, Auditing and Finance

Issue: Winter 2011

2011

The effect of research and development (R&D) inputs and outputs on the relation between the uncertainty of future operating performance and R&D expenditures

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Journal of Accounting, Auditing & Finance

Volume: 26

Issue: 1

2010

A unified framework of management earnings forecasts: voluntary, disclose or abstain, and opportunistic incentives

Journal/Publisher/Proceedings Publisher: Working paper, University of Rochester

2010

Aggregate uncertainty and management earnings forecasts

Contribution Type: Book, Chapter in Scholarly Book-New

2010

The Joint Effects of Materiality Thresholds and Voluntary Disclosure Incentives on Firms'' Disclosure Decisions

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Journal of Accounting and Economics

Issue: 2010

2010

The joint effects of materiality thresholds and voluntary disclosure incentives on firms’ disclosure decisions

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Journal of Accounting and Economics

Volume: 49

Issue: 1

2010

The Joint Effects of Materiality Thresholds and Voluntary Disclosure Incentives on Firms’ Disclosure Decisions

Journal/Publisher/Proceedings Publisher: Journal of Accounting and Economics

2010

A Unified Framework of Management Earnings Forecasts: Disclose or Abstain, Voluntary, and Opportunistic Incentives

Contribution Type: Journal Article, Academic Journal

2009

The effect of R&D inputs and outputs on the relation between the uncertainty of future operating performance and R&D expenditures

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Simon School Working Paper No. FR 09-05

2007

Regression Based Tests of the Market Pricing of Accounting Numbers: The Mishkin Test and Ordinary Least Squares

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Journal of Accounting Research

Issue: December 2007

2007

Regression-Based Tests of the Market Pricing of Accounting Numbers: The Mishkin Test and Ordinary Least Squares

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Journal of Accounting Research

Volume: 45

Issue: 5

2007

Soft-talk management cash flow forecasts: Verifiability, credibility and stock price effects

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Simon School Working Paper No. FR 06-01

2006

An analysis of the theories and explanations offered for the mispricing of accruals and accrual components

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Journal of Accounting Research

Volume: 44

Issue: 2

2006

Forecast verifiability and credibility: Evidence from management cash flow forecasts

Journal/Publisher/Proceedings Publisher: Working paper from the University of Rochester

2006

The Role of Self-Regulation in Corporate Governance: Evidence from the Netherlands

Journal/Publisher/Proceedings Publisher: Advances in Corporate Finance and Asset Pricing

Issue: 2006

2006

Why do managers voluntarily issue cash flow forecasts?

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Journal of Accounting Research

Volume: 44

Issue: 2

2006

An Analysis of the Theories and Explanations Offered for the Mis-Pricing of Accruals and Accrual Components

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Journal of Accounting Research

Issue: May 2006

2006

Why do Managers Voluntarily Issue Management Cash Flow Forecasts

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Journal of Accounting Research

Issue: May 2006

2005

Performance matched discretionary accrual measures

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Journal of accounting and economics

Volume: 39

Issue: 1

2005

The role of self-regulation in corporate governance: Evidence and implications from the Netherlands

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Journal of corporate finance

Volume: 11

Issue: 3

2004

Income Conservatism in the US Technology Sector

Contribution Type: Journal Article, Academic Journal

2004

Research design issues and related inference problems underlying tests of the market pricing of accounting information

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Simon School Working Paper No. FR 04-15

2004

The role of self-regulation in corporate governance: evidence and implications from The Netherlands

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: SSRN Working Paper Series

2001

Corporate governance in Nederland: Governance en financiele prestaties

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Maandblad voor Accountancy en Bedrijfseconomie

Volume: 75

2001

Information externalities associated with earnings pre-announcements

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Unpublished working paper, Simon School of Business, Rochester, NY

1999

Share price responses to technology firms’ negative quarterly earnings surprises

Journal/Publisher/Proceedings Publisher: Working Paper, University of Rochester, Rochester

1999

Stock-based incentive contracts and managerial performance: the case of Ralston Purina Company

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Journal of financial economics

Volume: 51

Issue: 2

1997

Regression-Based Tests of the Market Pricing of Accounting Numbers

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Journal of Accounting Research

Volume: 45

Issue: 5

1996

Estimating earnings response coefficients: Pooled versus firm-specific models

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Journal of Accounting and Economics

Volume: 21

Issue: 3

1996

Measuring abnormal daily trading volume for samples of NYSE/ASE and NASDAQ securities using parametric and nonparametric test statistics

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Review of Quantitative Finance and Accounting

Volume: 6

Issue: 3

1996

Stock Price Behavior Associated with Post-1974–75 LIFO Adoptions Announced at Alternative Disclosure Times

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Journal of Accounting, Auditing & Finance

Volume: 11

Issue: 4

1996

Estimating Response Coefficients: Pooled Versus Firm-Specific Models

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Journal of Accounting and Economics

Volume: 21

Issue: 3

1995

Can we implement research on stock trading rules?

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: The Journal of Portfolio Management

Volume: 21

Issue: 2

1995

Is research on trading rules implementable? The case of short-term contrarian strategies

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: The Case Of Short-Term Contrarian Strategies. Simon School of Business Working Paper FR

1994

The incidence of accounting changes and characteristics of firms making accounting changes

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Accounting Horizons

Volume: 8

Issue: 2

1993

Cynthia J. Campbell Universi/y of Massachuse//s, Amhers/, MA 01003. USA

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Journal of Financial Economics

Volume: 33

1993

EXECUTIVE-COMPENSATION-THE CASE OF RALSTON-PURINA-COMPANY

Contribution Type: Conference Proceeding

Volume: 48

Issue: 3

1993

j [; race Pownall Emory University Charles Wasley Washington University Gregory Waymire

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: THE ACCOUNTING REVIEW

Volume: 66

Issue: 4

1993

Measuring security price performance using daily NASDAQ returns

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Journal of Financial Economics

Volume: 33

Issue: 1

1993

Sensitivity of Multivariate Tests of the Capital Asset-Pricing Model to the Return Measurement Interval

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: The Journal of Finance

Volume: 48

Issue: 4

1993

The stock price effects of alternative types of management earnings forecasts

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Accounting Review

1992

A further examination of the economic consequences of SFAS No. 2

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Journal of Accounting Research

1990

The association between environmental performance and environmental disclosure in annual reports and 10Ks

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Advances in public interest accounting

Volume: 3

Issue: 2

1989

Measuring security price performance in size-clustered samples

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Accounting Review

1989

The relation between the return interval and betas: Implications for the size effect

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Journal of Financial Economics

Volume: 23

Issue: 1

1989

The relation between the return interval and betas: Implications for the size effect

Contribution Type: Journal Article, Academic Journal

Journal/Publisher/Proceedings Publisher: Journal of Financial Economics

Volume: 23

Issue: 1

1987

Bias in Estimation of Systematic Risk and its Implications for Tests of the CAPM

Contribution Type: Book, Scholarly-New

Journal/Publisher/Proceedings Publisher: Salomon Brothers Center for the Study of Financial Institutions, Graduate School of Business Administration, New York University

Issue: 404

1987

Bias in Estimation of Systematic Risk and its Implications for Tests of the CAPM

Contribution Type: Book, Scholarly-New

Journal/Publisher/Proceedings Publisher: Salomon Bros. Center for the Study of Financial Institutions, Graduate School of Business Administration, New York University

1987

Differential information content of earnings announcements: theoretical and empirical analysis of the role of information transfers

Journal/Publisher/Proceedings Publisher: University of Iowa

Current Research Programs

Bond/Debt Market Demands for Management Guidance

This paper explores how managers alter the nature of their voluntary management guidance as they become more reliance on debt versus equity financing.

Economic Determinants of Changes in the Aggregate Earnings-Returns Relation over Time

Prior research documents a negative contemporaneous relation between earnings changes and stock returns at the aggregate level. We find that the aggregate earnings-return relation turns significantly positive in recent years (1992-2013). As explanations for that shift we test over-time shifts in the properties of firm-level earnings and the magnitude of inflation rates. To do so we use the Bureau of Economic Analysis’ (BEA) corporate profits series as an alternative measure of aggregate earnings because it is unaffected by changes in GAAP measurement rules and is adjusted for changes in price levels. While changes in both aggregate GAAP earnings and the BEA’s corporate profits series exhibit a significant negative (positive) relation with aggregate returns in the 1970-1991 (1992-2013) period, changes in aggregate GAAP earnings have incremental explanatory power for aggregate returns beyond the BEA’s corporate profit measure in the 1992-2013 period. Additional analysis reveals that such incremental explanatory power stems from GAAP earnings’ inclusion of non-operating items. We also find that a shift over time in inflation, as well as in the proportion of loss-making firms, contribute to inter-temporal variation in the aggregate earnings-returns relation. The effect of changes in the properties of GAAP earnings and inflation rates over time on the aggregate earnings-return relation is new to the literature.

Evidence on the Role of Management Earnings Guidance in the Bond Market

This paper analyzes how earnings guidance effects bond prices.

Firm and Investor Response to Earnings Guidance Stoppage

This paper studies the actions taken by managers, analysts, and investors in response to the information void created when firms cease proving earnings guidance.

How do Debt/Credit Analysts use the Information Contained in Management Earnings Forecasts?

This paper analyses how debt and credit analysts use earnings forecast information.

Influential Observations in Accounting Research

This paper examines alternative approaches to handle influential observations in accounting research and how inferences are affected by that choice.

Measuring Real Activity Management

Much recent research focuses on earnings management via the manipulation of real activities (hereafter real earnings management or REM). While tests of REM hinge critically on the underlying model of abnormal real activities there is no systematic evidence on the properties of commonly used REM measures or of the specification of tests based on them. This study provides such evidence by documenting which REM measures lead to well-specified tests, and which do not, across a wide variety of settings encountered in accounting research. The results indicate that the traditional REM measures used (to-date) in the literature are severely mis-specified in that their Type I error rates differ significantly from nominal significance levels (e.g., 1% or 5%). To address such mis-specification we analyze alternative REM measures based on performance-matching. While performance-matched REM measures are not well-specified in each and every setting (no REM measure) the weight of the evidence suggests they will provide better-specified tests, compared to traditional REM measures, across a wide variety of settings. To further document the importance of our analysis we replicate recent research examining whether managers manipulate real activities to avoid reporting losses. This replication illustrates the importance and benefits of performance matching and shows that inferences change when performance-matched REM measures are used. Our evidence facilitates a keener interpretation of the inferences drawn in prior REM studies as well as informing future researchers on the trade-offs involved in measuring REM. Overall, the findings indicate that performance-matched REM measures provide a more reliable basis from which to draw inferences about REM than traditional measures. In some settings, however, performance-matched REM measures (as well as traditional REM measures) may provide conservative tests of REM-related hypotheses.

The Effect of Using Non-GAAP Earnings Measures in Executive Compensation Contracts on Income Statement Reporting Decisions

We investigate how use of Non-GAAP earnings measures in executive compensation plans effects managers’ income statement reporting/classification decisions. We predict and find that use of such measures (often called pro-forma earnings) leads managers to shift losses from core earnings to non-core earnings and that such firms are more likely to report special items. We also find that restatements of special items are more highly associated with use of non-GAAP executive compensation measures. The findings are robust to a variety of sensitivity/robustness tests including use of a propensity score-matched sample.

The Mix of Management Guidance

This study examines the economic factors that determine the mix of the different types of voluntary management guidance issued across firms and through time.

The Use of Non-GAAP Measures in Executive Compensation Plans

This papers develops and tests hypotheses about the use of non-GAAP measures in executive compensation plans including: 1) What are the economic determinants of firms'' adoption of non-GAAP measures in comp plans? 2) Do non-GAAP measures or plans heavily tilted toward non-GAAP measures lead to higher levels of future performance and/or improved/more efficient investment decisions? 3) Is there better pay for performance sensitivity after adoption of non-GAAP measures?

Voluntary Disclosure and Measured Asymmetric Timeliness

We document how voluntary disclosure of management earnings forecasts (MFs) affects the asymmetric timeliness of earnings measured using the Basu (1997) model. The rationale is that MFs affect the extent to which prices lead earnings, which in turn affects the asymmetric timeliness coefficient of the Basu (1997) model. We document the magnitude of the effect by examining MF subsamples formed based on the basis of horizon and news content. We find that for firms issuing MFs of future year earnings (forward-looking MFs), measured asymmetric timeliness is insignificant. In contrast, firms issuing MFs for periods that overlap with the Basu model’s return estimation interval display no evidence of reduced asymmetric timeliness. Further analysis reveals that the weaker asymmetric timeliness of firms issuing forward-looking MFs is concentrated in those that convey more negative news. Asymmetric timeliness is also absent for book-based (i.e., financial statement) measures of asymmetric timeliness, which is consistent with measurement concerns related to the effect of forward-looking MFs on stock returns. Additional tests reveal that the effect of forward-looking MFs on asymmetric timeliness is correlated with the fundamental determinants of conservatism. Our results document how managers’ MF disclosure decisions affect measured asymmetric timeliness separately and distinctly from managerial actions that influence the recognition of news in earnings via the effects of the conservatism imbedded in accounting rules.

Voluntary Disclosure Strategies and Firm Visibility: Evidence from Private Firm Disclosure

We examine voluntary disclosure by IPO firms in the one-year period prior to filing a prospectus with the Securities and Exchange Commission. Specifically, we consider the determinants and consequences of pre-prospectus press releases and attendance at broker-hosted conferences by the IPO firm. These voluntary disclosure activities are undertaken when the firm is private. In contrast, prior research focuses almost entirely on voluntary disclosure activities undertaken by public firms.