C.R. Harvey). AbstractWe survey and interview more than 400 executives to determine the factors that drive reported earnings and disclosure decisions. We find that managers would rather take economic actions that could have negative long-term consequences than make within-GAAP accounting choices to manage earnings. A surprising 78% of our sample admits to sacrificing long-term value to smooth earnings. Managers also work to maintain predictability in earnings and financial disclosures. We also find that managers make voluntary disclosures to reduce information risk and boost stock price but at the same time, try to avoid setting disclosure precedents that will be difficult to maintain. r 2005 Elsevier B.V. All rights reserved. JEL classification: G35; G32; G34

No abstract

No abstract

Forum on Corporate Finance and the University of Washington for comments. Finally, we thank the financial executives who generously allowed us to interview them or who took time to fill out the survey. We acknowledge financial support from the John W. Hartman Center at