Real-time revenue and firm disclosure

Elizabeth Blankespoor (), Bradley E. Hendricks (), Joseph Piotroski () and Christina Synn ()
Additional contact information
Elizabeth Blankespoor: University of Washington, Foster School of Business
Bradley E. Hendricks: University of North Carolina at Chapel Hill, Kenan-Flagler Business School
Joseph Piotroski: Stanford University, Graduate School of Business
Christina Synn: American University, Kogod School of Business

Review of Accounting Studies, 2022, vol. 27, issue 3, No 8, 1079-1116

Abstract: Abstract We examine firm disclosure choice when information is received on a real-time, continuous basis. We use transaction-level credit and debit card sales for a sample of retail firms to construct a weekly measure of abnormal revenue for each firm. We validate the informativeness of this abnormal real-time revenue information, confirming its positive correlation with abnormal returns, unexpected revenue realizations, and management revenue forecast news. Using revenue forecasts, we find that firms are less likely to disclose abnormally negative news early in the quarter. As the quarter progresses, firms reduce their withholding of negative news. These results are consistent with impending earnings announcements disciplining managers to provide negative news. This pattern of initial withholding and then disclosure exists primarily in firms with high analyst coverage, high institutional ownership, or high litigation risk. Finally, we find increased insider stock sales in weeks with abnormally negative news and no firm disclosure. Overall, our study provides evidence of the informativeness of real-time information and manager discretion in its release.

Keywords: Real-time revenue; Private information; Management forecasts; Disclosure dynamics; Insider trading; Voluntary disclosure; G14; M41; M45; D82 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://link.springer.com/10.1007/s11142-022-09703-2 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:reaccs:v:27:y:2022:i:3:d:10.1007_s11142-022-09703-2

Ordering information: This journal article can be ordered from
http://www.springer.com/accounting/journal/11142

DOI: 10.1007/s11142-022-09703-2

Access Statistics for this article

Review of Accounting Studies is currently edited by Paul Fischer

More articles in Review of Accounting Studies from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().