Geographic earnings disclosure and trading volume

Beginning with Statement of Financial Accounting Standards No. 131 (SFAS 131), Disclosures about Segments of an Enterprise and Related Information, most US multinational firms no longer disclose geographic earnings in their annual reports. Given the recent growth in foreign operations of US firms and the varying operating environments around the world, information (or lack thereof) related to geographical performance can affect investors’ information set. Using empirical tests that closely follow the [Kim, O., Verrecchia, R., 1997. Pre-announcement and event-period private information. Journal of Accounting and Economics 24, 395–419] model, we find results consistent with their predictions. Specifically, using a sample of firms with substantial foreign operations, we find evidence of a decrease in event period private information following adoption of SFAS 131 for firms that no longer disclose geographic earnings. These results suggest that decreased public information (i.e., non-disclosure of geographic earnings) reduces the ability of investors to utilize or generate private information in conjunction with the public announcement of quarterly earnings, which dampens trading. We also find evidence of a decrease in pre-announcement private information following adoption of SFAS 131. This is consistent with an overall improvement in public disclosures that has the effect of reducing differences in the precision of private information across investors in the period prior to the earnings announcement. However, such an effect is observed for both firms which no longer disclose geographic earnings and for firms that continue to disclose geographic earnings.     

Non-GAAP Earnings and the Earnings Quality Trade-off

Using a large sample of earnings press releases by Australian firms, we compare multiple attributes of non-GAAP earnings measures with their closest GAAP equivalent. We find that, on average, non-GAAP earnings are more persistent, smoother, more value relevant, and have higher predictive power than their closest GAAP equivalent. However, the same set of non-GAAP earnings disclosures are also less conservative and less timely than their closest GAAP equivalent. The results are consistent with non-GAAP earnings measures reflecting a reversal of the trade-off between the valuation and stewardship roles of accounting inherent in accounting standards and the way they are applied. We also find that differences in several of these attributes between GAAP and non-GAAP earnings are more evident in larger firms, firms with lower market-to-book ratios, firms with a higher proportion of independent directors, and firms that report profits rather than losses. Our evidence is consistent with the argument that accounting standards impose significant amounts of conditional conservatism at some cost to the valuation role of accounting information. Non-GAAP earnings measures can therefore be seen as a response to the challenges faced by a single GAAP performance measure in satisfying the competing demands of value relevance and stewardship.     

Repetitive disclosures in the MD&A

This study is the first to empirically analyze repetitive disclosures in the Management Discussion and Analysis (MD&A) section of the 10‐K filing. Repetitive disclosures refer to the extent that content in the MD&A is repeated from the audited financial statement notes. I empirically analyze repetitive disclosures in the MD&A section of the 10‐K filing, and find that firms tend to use more repetitive disclosures when firms have a new CEO, a high level of new disclosures in the notes, issued equity, and have missed the prior year's earnings benchmark. These findings suggest that not all managers use repetitive disclosures to simply obfuscate disclosures. Rather, some managers use repetitive disclosures to emphasize firm‐specific events, consistent with the succession hypothesis. The Securities and Exchange Commission (SEC) states that repetitive disclosures are uninformative and that such disclosures decrease the informativeness of other disclosures in the MD&A. Casting doubt on the SEC's comments, in my primary analyses, I find that repetitive disclosures are informative to investors; this result is stronger for individual investors. Overall, my results suggest that repetitive disclosures are informative, and such disclosures may be effective tools for providing information to investors.     

?护生画集?初版时间再考

丰子恺绘作的“护生画”影响深远，但学界对?护生画集?的初版时间却一直表述不清，甚至存在争议。根据弘一法师书信和相关史料，可以厘清?护生画集?的编绘、出版始末，并知晓从?戒杀画集?到?护生画集?这一名称变化的过程。经过考证，可知?护生画集?不可能初版于1928年2月，应初版于1929年1月至7月之间。     

Textual Analysis in Accounting and Finance: A Survey

Relative to quantitative methods traditionally used in accounting and finance, textual analysis is substantially less precise. Thus, understanding the art is of equal importance to understanding the science. In this survey, we describe the nuances of the method and, as users of textual analysis, some of the tripwires in implementation. We also review the contemporary textual analysis literature and highlight areas of future research.     

Credit Ratings and Managerial Voluntary Disclosures

This study investigates whether managers influence credit ratings via voluntary disclosures. I find that firms near a rating change have a higher incidence of a disclosure regarding product and business expansion (PBE) plans. This finding is more evident for firms that are subject to lower proprietary costs of disclosures, which implies that managers do trade off both the benefits and costs of the disclosures. I find no evidence that firms close to a rating change selectively release good news or suppress bad news on PBE. Overall, my results suggest that firms generally exhibit a credible commitment to maintaining disclosure transparency for a desired credit rating.     

The Timeliness of Restatement Disclosures and Financial Reporting Credibility

This study investigates whether prompt discovery and disclosure of earnings restatements is associated with greater post‐restatement financial reporting credibility. We measure the timeliness of restatement detection by the length of time between the end of the misstated period and the subsequent restatement announcement. We document that shorter detection periods are significantly associated with high‐quality corporate governance characteristics and executive and/or auditor turnover, but not with characteristics of restatements. We also find that firms with shorter detection periods exhibit a more moderate decline in the information content of earnings following restatement announcements relative to firms with longer detection periods, and that detection period length has an incremental effect on the information content of earnings relative to executive and/or auditor turnover alone. In addition, we find that restatement disclosures are more timely following the implementation of the SOX‐era reforms, and that only firms with shorter detection periods experience more moderate post‐restatement declines in the information content of earnings following the implementation of the SOX‐era reforms. The results from this study suggest that the timeliness of restatement detection and disclosure is associated with greater financial reporting credibility following restatements.     

The impact of community expectations on corporate community involvement disclosures in the UK

Despite increase mistrust between corporations and societies in the aftermath of the global corporate misbehaviours, the literature examining the impact of community concerns on corporate communications is undeveloped. Our paper is timely; it contributes to the literature on corporate social responsibility (CSR) by considering the impacts of community expectations on Corporate Community Involvement Disclosures (CCID) using a ten-year panel study. We advance CSR communication research by providing a fresh theoretical perspective – media-agenda-setting theory – to the broad CSR debate and the CCID subset of this debate. Our findings support the media-agenda theoretical expectation and provide important practice and policy recommendations for improving interactions between corporations and their communities.     

Determinants of monetary penalties for environmental violations

This research investigates the likely determinants of monetary penalties for poor environmental performance. We retrieve data from Bloomberg on the monetary penalties imposed on companies in the European Union (EU) found to have performed poorly in corporate social responsibility (CSR), and particularly in the environmental aspects of CSR. Our primary findings reveal that firms with high levels of greenhouse gas and hazardous waste emissions are more likely to receive monetary penalties. On the other hand, firms that invest in green supply chain practices and disclose environment‐related matters avoid monetary penalties more. We also find that firms having executive compensation linked with environmental compliance face more monetary penalties. This finding adds a new dimension to the voluminous research on executive compensation that has investigated primarily the effects of cash and stock option‐based compensation schemes on pay–performance sensitivities. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment