|
|||||
|
|
A Comparison of Reporting Lags of Multinational and Domestic Firms |
|
| Authors: | Ho-Young Lee Vivek Mande Myungsoo Son |
| Affiliation: | Professor of Accounting, School of Business, Yonsei University 134 Sinchon-Dong Seodaemun-Gu, Seoul 120-749, Korea e-mail:; Professor of Accounting, Department of Accounting, California State University, Fullerton P.O. Box 6848 LH-630, Fullerton, CA 92834-6848, USA e-mail:; Associate Professor of Accounting, Department of Accounting, California State University, Fullerton P.O. Box 6848 LH-630, Fullerton, CA 92834-6848, USA e-mail: |
| Abstract: | This study examines whether multinational firms report earnings sooner than domestic firms. When compared with domestic firms, the reporting environment and business operations of multinational firms are significantly more complex. There is a greater amount of information asymmetry between managers and shareholders of multinational firms. Therefore, multinational firms potentially face higher monitoring and external financing costs. To reduce these costs, we conjecture that managers of multinational firms take steps to reduce the information asymmetry between shareholders and management by increasing the timeliness (a proxy for relevance) of their earnings reports. Specifically, we expect multinational firms to announce earnings earlier than domestic firms. We separate earnings reporting delay into auditor‐related delay and management's discretionary delay. While test results weakly support the hypothesis that auditors take longer to audit multinational firms, there is strong evidence that managers of multinational firms release their earnings reports sooner than domestic firms. |
| Keywords: | |