A growing disparity in earnings disclosure mechanisms: The rise of concurrently released earnings announcements and 10-Ks

Arif, Salman; Marshall, Nathan T.; Schroeder, Joseph H.; Yohn, Teri Lombardi

doi:10.1016/j.jacceco.2018.11.002

Cited by 69 publications

(51 citation statements)

References 59 publications

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“…Further, EBM also addresses various issues associated with the PSM, including low levels of covariate balance and failure to jointly balance all the covariates (Hainmueller & Xu, 2013). The EBM approach is used in accounting literature (Arif et al., 2019).…”

Section: Additional and Robustness Testsmentioning

confidence: 99%

“…Second, following prior studies (e.g., Arif et al., 2019; Hainmueller, 2012), we implement the entropy balancing method (EBM) to balance the three moments (mean, variance, and skewness) of control variables across observations with and without major government customers. After implementing the EBM, we continue to find that firms with major government customers are associated with lower SPCR.…”

Section: Introductionmentioning

confidence: 99%

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Governments as customers: Exploring the effects of government customers on supplier firms’ information quality

Chen

Huang

Garg

et al. 2021

Business Fin & Account

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This study finds that firms with major government customers have better information quality and, therefore, lower future stock price crash risks. Our main findings are robust to various tests accounting for endogeneity concerns, including propensity score matching analysis and entropy balancing method. We also conduct a difference‐in‐differences analysis based on a quasi‐natural experiment that exogenously enhances government procurement contracts’ disclosure quality. Further analysis shows that the effects of government customers are more pronounced when traditional information intermediaries are weaker (i.e., firms with lower institutional ownership and analyst coverage, of smaller size, and audited by non‐industry‐specialized auditors). Consistent with government customers improving the information quality, we also find that firms with major government customers are less likely to have SEC‐attributed restatements.

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Section: Additional and Robustness Testsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Governments as customers: Exploring the effects of government customers on supplier firms’ information quality

Chen

Huang

Garg

et al. 2021

Business Fin & Account

View full text Add to dashboard Cite

show abstract

“…Conference calls therefore allow analysts to obtain additional information to verify bundled guidance. We next consider 10‐K or 10‐Q filings as another source of concurrent disclosures (Arif et al 2019). Similarly, analysts may find the bundled guidance more credible because of the additional disclosure they can obtain from a 10‐K or 10‐Q filing on the same day.…”

Section: Mechanism Analysesmentioning

confidence: 99%

Bundled Earnings Guidance and Analysts' Forecast Revisions*

Hsu

Wang

2021

Contemporary Accting Res

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Bundling managerial earnings guidance with quarterly earnings announcements (EAs) has become an increasingly common practice. This study investigates the impact of bundled guidance on analysts' forecast revisions. Our findings indicate that analysts respond more to bundled guidance than non-bundled guidance. This effect increases with analysts' time pressure and cognitive constraints around the EA. Analysts' revisions also incorporate more of the bundled management guidance when accompanied by additional information, such as conference calls. We further find that analysts revise their forecasts more quickly following bundled guidance than non-bundled guidance. Together, these findings are consistent with the notion that analysts place more weight on bundled guidance than on non-bundled guidance in their forecast revisions as bundled guidance facilities analysts' timely forecast revisions following EAs. Finally, we find that analysts' forecast revisions following bundled guidance generate significant market reactions. Our findings enhance our understanding of analysts' information processing and shed light on why bundling can be an effective guidance strategy.

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“…This can lead to greater uncertainty for delayed earnings reports associated with an annual filing. For example, Arif, Marshall, Schroeder, and Yohn (2019) find that absolute returns and abnormal variances are higher for firms with a longer lag between their fiscal year-end and their annual EAD.…”

Section: Information Spillovers Earnings Announcement Timing and mentioning

confidence: 99%

Earnings announcement timing, uncertainty, and volatility risk premiums

Adams

Neururer

2020

Journal of Futures Markets

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We examine the relationship between firms’ quarterly earnings report timing and uncertainty before quarterly earnings announcements. Prior research provides conflicting predictions on how investor uncertainty and report timing are related. Using implied volatilities from equity options and the realized returns to straddle positions, we find evidence that uncertainty and volatility risk premiums are higher for firms that report later in the quarter. Further tests show that the increase in option premiums is unexplained by risk factors suggesting a mispricing by investors. These results are not associated with static firm‐level factors and our findings are concentrated in high growth firms.

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A growing disparity in earnings disclosure mechanisms: The rise of concurrently released earnings announcements and 10-Ks

Cited by 69 publications

References 59 publications

Governments as customers: Exploring the effects of government customers on supplier firms’ information quality

Governments as customers: Exploring the effects of government customers on supplier firms’ information quality

Bundled Earnings Guidance and Analysts' Forecast Revisions*

Earnings announcement timing, uncertainty, and volatility risk premiums

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