The evolution of 10-K textual disclosure: Evidence from Latent Dirichlet Allocation

Travis Dyer, Mark Lang and Lorien Stice-Lawrence

Journal of Accounting and Economics, 2017, vol. 64, issue 2, 221-245

Abstract: We document marked trends in 10-K disclosure over the period 1996–2013, with increases in length, boilerplate, stickiness, and redundancy and decreases in specificity, readability, and the relative amount of hard information. We use Latent Dirichlet Allocation (LDA) to examine specific topics and find that new FASB and SEC requirements explain most of the increase in length and that 3 of the 150 topics—fair value, internal controls, and risk factor disclosures—account for virtually all of the increase. These three disclosures also play a major role in explaining the trends in the remaining textual characteristics.

Keywords: Disclosure regulation; Textual analysis; Latent Dirichlet Allocation; Financial reporting (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (117)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jaecon:v:64:y:2017:i:2:p:221-245

DOI: 10.1016/j.jacceco.2017.07.002

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