Voluntary and mandatory disclosures: Do managers view them as substitutes?

Noh, Suzie; So, Eric C.; Weber, Joseph

doi:10.1016/j.jacceco.2019.101243

Cited by 61 publications

(39 citation statements)

References 42 publications

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“…When the costs to privately communicate outweigh the benefits, the firm may refrain from doing so. For instance, firms' requirement to promptly disclose 8-K filings to release material information has led to a recent decline in voluntary public disclosure (Noh et al [2019]), which can either mean that firms now choose private disclosure or that firms also refrain from leaking news privately. Billings et al…”

Section: Research Question and Hypothesismentioning

confidence: 99%

“…These results further strengthen the idea that I can capture firms' private disclosure of earnings warnings and not incentives to guide expectations. I conclude that although firms can bundle positive and negative news (Bliss et al [2018]), issue public earnings warnings (e.g., Skinner [1994]), and release 8-K filings (Noh et al [2019]) to reduce shareholder litigation risk, managers can additionally engage in private communication to leak bad news through analysts to the market.…”

Section: Expected Litigation Risk and Managers' Propensity To Leak Bad News Privatelymentioning

confidence: 99%

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Shareholder Litigation Risk and Managers’ Private Disclosure of Earnings Warnings

Schafhäutle

2021

SSRN Journal

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This paper examines managers' use of a private disclosure channel to provide early earnings warnings and therefore reduce bad news shocks around public announcements. I ask whether firms are more likely to provide private earnings warnings to analysts when expected shareholder litigation risk increases. To identify private communication, I measure variation in firms' propensity to privately disclose earnings warnings using the difference between analysts' and a selected group of benchmark forecasters' revisions of short-term earnings forecasts around earnings announcements. Using plausibly exogenous variation in expected shareholder litigation risk based on judge ideology, I find that managers are more likely to leak bad news privately when shareholder litigation risk increases. This effect is concentrated among large firms that are more likely the target of shareholder lawsuits. I conclude that firms react to the legal system by disclosing private earnings warnings to ensure stock prices incorporate this information in a timely manner.

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Section: Research Question and Hypothesismentioning

confidence: 99%

Section: Expected Litigation Risk and Managers' Propensity To Leak Bad News Privatelymentioning

confidence: 99%

Shareholder Litigation Risk and Managers’ Private Disclosure of Earnings Warnings

Schafhäutle

2021

SSRN Journal

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“…Financial disclosures are considered as an important research area that has attracted numerous accountancy scholars over the past few decades (Noh et al, 2019). Voluntary disclosure on R&D is essential for a better valuation of firm performance and to attract potential investors.…”

Section: Randd Disclosures and Earnings Management 111mentioning

confidence: 99%

R&D disclosures and earnings management

Lakhal

Dedaj²

2019

JFRA

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Purpose The purpose of this paper is to examine the effect of Research and Development (R&D) disclosures on earnings management practices. Design/methodology/approach This study has been conducted by using a longitudinal archival data set of French companies belonging to the CAC All-Tradable index and instrumental variable estimations. Findings The results of the research highlight the moderating effect of International Financial Reporting Standards (IFRS) adoption and the financial crisis in this relationship. It also shows that R&D disclosures are negatively associated with earnings management. The findings also show that the IFRS adoption is complementary in its monitoring role of managerial behavior in reducing earnings management in the presence of R&D disclosures. Furthermore, this study finds that the negative effect of R&D disclosures on earnings management is more prevalent during the global financial crisis. Originality/value This study examined the consequences of the voluntary disclosure of R&D information in the French context. It introduces a measurement for the disclosure of R&D activities in annual reports through the construction of an R&D disclosure index.

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“…Previous research related to the determinants of the extent of voluntary disclosure has been conducted, including Chakroun & Matoussi (2012); Nie et al (2016); Lu (2018); Zaini et al (2018) and Noh et al (2019). Chakroun & Matoussi (2012) state that the extent of voluntary disclosure able to encourage capital market efficiency.…”

Section: Introductionmentioning

confidence: 99%

Voluntary Disclosure, Earnings Response Coefficient and Earnings Persistence

Lestari

2020

JRAK

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One of management credibility aspect showed by extent voluntary information disclosed. Management who more credible do more voluntary disclosure. Management use voluntary disclosure as tools to inform good signal happening to all stakeholders, include good earnings quality. This study examine the association of voluntary disclosure to earnings response coefficient (ERC) and earning persistence as earnings quality. Study uses 274 samples of listed firms across different industries in Indonesia, excluding financial industry for the financial period 2015. Ordinary least square (OLS) cross-sectional method is implemented to test the research hypotheses. The results of hypothesis test of the study exhibit a significant negative association between voluntary disclosure to ERC. This study also found no association statistically between voluntary disclosure to earnings persistence. This research conducted for one period, so for future research should to extent year observations. The study also conducted additional testing of disclosures based on disclosure criteria. This test was conducted to determine the type of voluntary disclosure that has a significant influence on the dependent variable of the study, ERC and earnings persistence.Keywords: Earnings Responses Coefficient, Voluntary Disclosure, Earnings Persistence

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Voluntary and mandatory disclosures: Do managers view them as substitutes?

Cited by 61 publications

References 42 publications

Shareholder Litigation Risk and Managers’ Private Disclosure of Earnings Warnings

Shareholder Litigation Risk and Managers’ Private Disclosure of Earnings Warnings

R&D disclosures and earnings management

Voluntary Disclosure, Earnings Response Coefficient and Earnings Persistence

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