An investigation of nonprofessional investors' qualitative materiality judgments incorporating SEC listed vs. non-listed events

Robert Pinsker, Terence J. Pitre and Ronald Daigle

Journal of Accounting and Public Policy, 2009, vol. 28, issue 5, 446-465

Abstract: When the SEC began listing specific potentially material events in its Regulation FD [Regulation Fair Disclosure, 2000. SEC Release 33-7881, Rules 101-103], it deviated from its long-time "policy" of not providing materiality guidance to auditors and managers. What is currently unclear in the materiality literature is which factor(s) - information-based characteristics or user-based characteristics - has an effect on nonprofessional investor qualitative materiality judgments. Using a series of experimental markets, we examine and find no evidence that an information-based characteristic (distinguishing between listed and non-listed events) has an effect on nonprofessional investors' materiality judgments. Our evidence regarding user-based characteristics is mixed. We do not find evidence of the direction of disclosed events impacting investors' judgments, but we do find evidence of an anchoring effect. Our findings indicate that the content of the information disclosed to nonprofessional investors is not as important as the timing of the disclosure. Our investigation is unique in that we consider the (qualitative) nature of the event, rather than simply its (quantitative) magnitude.

Keywords: Belief revision; Materiality; Information processing; Disclosure (search for similar items in EconPapers)
Date: 2009
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0278-4254(09)00053-2
Full text for ScienceDirect subscribers only

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:eee:jappol:v:28:y:2009:i:5:p:446-465

Access Statistics for this article

Journal of Accounting and Public Policy is currently edited by L. A. Gordon

More articles in Journal of Accounting and Public Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().