Voluntary disclosure under uncertainty about the reporting objective

Einhorn, Eti

doi:10.1016/j.jacceco.2007.03.001

Cited by 65 publications

(33 citation statements)

References 25 publications

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“…In the ex post disclosure literature, Einhorn (2007) predicts that a …rm can withhold information (is less likely to disclose) when investors are uncertain about whether the …rm prefers to increase or decrease stock price. Corollary 1 suggests the opposite: more …rms disclose when the uncertainty about …rms'preferences is higher.…”

Section: Thementioning

confidence: 99%

“…While the …rm in Fischer and Verrecchia (2000) always discloses, Korn (2004), Kwon, Newman, andZang (2009), andEinhorn andZiv (2012) study settings where a single …rm decides whether to disclose potentially biased information. In these settings, the …rm withholds su¢ ciently bad news and, conditional on disclosure, the market can perfectly back out any bias because it is informed about the …rm's incentives.…”

Section: Introductionmentioning

confidence: 99%

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Bias and the Commitment to Disclosure

Heinle

Verrecchia

2016

Management Science

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This paper studies the propensity of firms to commit to disclose information that is subsequently biased, in the presence of other firms also issuing potentially biased information. An important aspect of such an analysis is the fact that firms can choose whether to disclose or withhold information. We show that allowing the number of disclosed reports to be endogenous introduces a countervailing force to some of the empirical predictions from the prior literature. For example, we find that as more firms issue reports or as the correlation across firms' cash flows increases, the firm biases its report less. However, when we treat firms' disclosure choices as endogenous, we show that the number of firms that commit to disclose decreases as the correlation across these cash flows increases, and this, in turn, offsets the direct effect of the correlation on bias. AbstractThis paper studies the propensity of …rms to commit to disclose information that is subsequently biased, in the presence of other …rms also issuing potentially biased information. An important aspect of such an analysis is the fact that …rms can choose whether to disclose or withhold information. We show that allowing the number of disclosed reports to be endogenous introduces a countervailing force to some of the empirical predictions from the prior literature. For example, we …nd that as more …rms issue a report or as the correlation across …rms' cash ‡ows increases, the …rm biases its report less. However, when we treat …rms' disclosure choices as endogenous, we show that the number of …rms that commit to disclose decreases as the correlation across these cash ‡ows increases, and this, in turn, o¤sets the direct e¤ect of the correlation on bias.

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Section: Thementioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Bias and the Commitment to Disclosure

Heinle

Verrecchia

2016

Management Science

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“…3 While the literature recognizes the potential conflict among these benchmarks (e.g. Einhorn, 2007;Graham et al, 2005), to date, research has looked at each benchmark in isolation. In this study, I fill this lacuna by examining the properties of discretionary accruals for small loss firms.…”

Section: Introductionmentioning

confidence: 99%

The effect of alternative goals on earnings management studies: An earnings benchmark examination

Hansen

2010

Journal of Accounting and Public Policy

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“…We do not examine in this setting extensions to other voluntary environments, such as disclosures by other parties(Arya and Mittendorf, 2005), uncertainty about investors' knowledge(Suijs, 2007) or uncertainty about reporting objectives(Einhorn, 2007). However, the interactions between endogenous mandatory disclosure and voluntary disclosure offer a promising area for future research.J.…”

mentioning

confidence: 99%