The capital market implications of the frequency of interim financial reporting: an international analysis

Mensah, Yaw M.; Werner, Robert H.

doi:10.1007/s11156-007-0069-0

Cited by 22 publications

(2 citation statements)

References 24 publications

(18 reference statements)

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“…That is, in providing an update on firms' activities to financial analysts in this way; interim reporting is capable of contributing to a reduction in insider trading by setting into the public domain timely information which would otherwise be confidentially held until the year end (Opong, 1995). Mensah and Werner (2008) examined the extent to which the frequency of interim financial reporting may affect share price volatility in financial market over the course of the year. They examination focuses on different interim reporting regimes in four different countries: Canada and the United States with quarterly reporting, and Australia and the UK with half-yearly interim financial reporting.…”

Section: Discussionmentioning

confidence: 99%

Frequency of Financial Reports

Darjezi¹,

Khansalar²

2013

IJBM

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Interim reports are summary statements that are usually prepared in semi-annual format in the UK. Until the EU's Transparency Directive was put into practice in the UK in 2007, there was no legal necessity for companies to provide interim financial reports. (Note 1) Instead such preparation was only a regulatory requirement of the London Stock Exchange. The responsibility on companies listed on the London Stock Exchange to provide these financial reports was first prepared as an suggestion in 1964, to meet the requirements for updates by financial analysts (May, 1971). In 1973, this advice to provide the market with interim information became a requirement for the admission of stocks and securities to be listed on the stock Exchange (Lunt, 1982). This study investigates the preparation of interim reports, and accounting standards for interim reporting. Also, this study discusses the main purpose of interim reports, the methods of preparation and the benefits of reporting frequency.

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Section: Discussionmentioning

confidence: 99%

Frequency of Financial Reports

Darjezi¹,

Khansalar²

2013

IJBM

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“…() investigate firms that voluntarily increased reporting frequencies and firms that abided by Securities and Exchange Commission regulations, and find that the timeliness of the former firms' reporting improved, while that of the latter did not. Using international evidence, Mensah and Werner () show that price volatility was higher in countries with quarterly reporting, like the US and Canada, than in countries with semi‐annual reporting, such as the UK and New Zealand. Thus, the results are mixed.…”

Section: Introductionmentioning

confidence: 99%

Information Asymmetry and Quarterly Disclosure Decisions by Firms: Evidence From the Tokyo Stock Exchange

Kubota

Takehara

2015

Int Rev Finance

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This study investigates whether the new quarterly disclosure reporting requirement issued by the Tokyo Stock Exchange was related to the reduction of the degree of private information‐based trade and the liquidity of listed stocks in Japan, or as a reverse causality, helped dichotomize good firms and bad firms as a separating signaling equilibrium. We use the probability of asymmetric information‐based trade (Adjusted PIN) as a measure of information asymmetry and the probability of symmetric order‐flow shock (PSOS) as a measure of market illiquidity. We use a sample of public firms from 2002 to 2007 that chose to either disclose or not disclose quarterly financial reports. We find that the disclosing firms had lower information asymmetry (Adjusted PIN), lower symmetric order‐flow shocks (PSOS), and lower private information‐based trade (PIN). When we conduct further difference‐in‐differences tests, we find that the firms with lower information asymmetry and higher liquidity had a higher tendency to disclose their financial statements and vice versa. Thus, the new disclosure requirement did not necessarily improve the information asymmetry and liquidity of firms, but instead helped good and bad firms form a case for a separating signaling equilibrium.

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