Voluntary and mandatory disclosures: Do managers view them as substitutes?

Suzie Noh, Eric C. So and Joseph P. Weber

Journal of Accounting and Economics, 2019, vol. 68, issue 1

Abstract: We examine the relation between firms' voluntary guidance and mandatory 8K filings. We find a negative relation between guidance and 8Ks, which strengthens following the 2004 expansion of mandatory 8K requirements, consistent with firms using the disclosures as substitutes. Increases in 8Ks coincide with declines in firms’ profits, but this negative relation weakens after the 2004 regulation, consistent with firms broadening the scope of information conveyed through 8Ks. Together, our findings suggest firms became more reliant on 8Ks to convey general types of information after the 2004 regulation, rather than primarily negative news, which reduces their incentives to issue guidance.

Keywords: Accounting disclosure; Regulation; Forecasting; Capital markets (search for similar items in EconPapers)
JEL-codes: M40 M41 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jaecon:v:68:y:2019:i:1:s0165410119300382

DOI: 10.1016/j.jacceco.2019.101243

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