Nonfinancial Measures and Fraud Risk: Evaluating Investors' Reactions to Greater Transparency

We thank Zabihollah Rezaee (editor) and two anonymous reviewers for many constructive comments. This study has benefited from presentations at Brigham Young University, Drexel University, George Mason University, Michigan State University, North Carolina State University, The University of Alabama, University of Arkansas, University of Manitoba, University of Nevada, Las Vegas, University of Notre Dame, University of South Carolina, University of Wisconsin–Madison, the 2011 Southeast Summer Accounting Research Conference (SESARC), the Institute for Fraud Prevention, the 2011 Research Center on the Prevention of Financial Fraud Conference, the Financial Industry Regulatory Authority, and the Office of the Chief Accountant of the Securities and Exchange Commission. We thank Ashley Austin, Michael Bamber, Derek Barr-Pulliam, Paul Beswick, Ted Christensen, Brian Croteau, Brooke Elliott, Erin Hamilton, Chris Hogan, Karla Johnstone, Susan Krische, Kathleen Linn, Laureen Maines, William Messier, Gary Peters, Kara Obermire, Aaron Saiewitz, Christy Sims, Jason Smith, Kristy Towry, Terry Warfield, David Wood, and Mark Zimbelman for their helpful comments and Madison Bell, Dylan Johnson, and Devon Parker for their research assistance. This research was supported by a grant from the Financial Industry Regulatory Authority (FINRA) Investor Education Foundation.

All results, interpretations, and conclusions expressed are those of the authors alone, and do not necessarily represent the views of the FINRA Investor Education Foundation or any of its affiliated companies.

Joseph F. Brazel, North Carolina State University, Poole College of Management, Department of Accounting, Raleigh, NC, USA; Tina D. Carpenter, The University of Georgia, Terry College of Business, J.M. Tull School of Accounting, Athens, GA, USA; Keith L. Jones, The University of Kansas, School of Business, Department of Accounting, Lawrence, KS, USA; Jane M. Thayer, Georgia Institute of Technology, Scheller College of Business, Department of Accounting, Atlanta, GA, USA.

Editor's note: Accepted by Joseph H. Zhang.