 Firm Disclosures about Enforcement ReviewsJörg-Markus Hitz and Henning Schnack Accounting in Europe, 2019, vol. 16, issue 1, 82-105 Abstract: This paper provides descriptive evidence on voluntary firm disclosures related to enforcement reviews. Our analyses are set in the German institutional environment, where firms are mandated to disclose error announcements if enforcement institutions, after conclusion of the review, formally establish financial statements to contain material errors. We find that firms provide voluntary disclosures about ongoing enforcement reviews on rare occasions while they opt to disclose information about concluded reviews more frequently. Content analyses reveal that the format of disclosures about ongoing reviews is potentially associated with the eventual review outcome, which is consistent with firms deliberately using these disclosures. This interpretation is supported by additional multivariate analyses of disclosures relating to ongoing reviews, which turn out more likely for contentious reviews. Analysis of market reactions provides weak evidence that investors price these disclosures, as negative market responses to the disclosure of error findings are mitigated. Hence, our paper provides a novel angle on the growing literature on accounting enforcement and yields insights into firm-level incentives for strategic disclosures. Date: 2019 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:acceur:v:16:y:2019:i:1:p:82-105 Ordering information: This journal article can be ordered from DOI: 10.1080/17449480.2018.1519320 Access Statistics for this article Accounting in Europe is currently edited by Lisa Evans More articles in Accounting in Europe from Taylor & Francis Journals |
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