The Effect on Financial Reporting Quality of an Exemption from the SEC Reporting Requirements for Foreign Private Issuers

Giorgio Gotti and Stacy Mastrolia

The International Journal of Accounting, 2012, vol. 47, issue 1, 44-71

Abstract: We test for differences in financial reporting quality between companies that are required to file periodically with the SEC and those that are exempted from filing reports with the SEC under Rule 12g3-2(b). We examine three earnings quality measures: conservatism, abnormal accruals, and the predictability of earnings. Our results, for all three measures, show different financial reporting quality for companies that file with the SEC than for companies exempt from the filing requirements. This paper provides empirical evidence of a link between filing with the SEC and financial reporting quality for foreign firms.

Keywords: Exemption; 1934 Exchange Act; Rule 12g3-2(b); Earnings quality; SEC; Foreign private issuers (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:accoun:v:47:y:2012:i:1:p:44-71

DOI: 10.1016/j.intacc.2011.12.002

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