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Financial Reporting Quality And Proprietary Costs
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Book Synopsis Financial Reporting Quality and Proprietary Costs by : Daniel A. Cohen
Download or read book Financial Reporting Quality and Proprietary Costs written by Daniel A. Cohen and published by . This book was released on 2008 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study investigates the association between proprietary costs and the quality of financial reporting. Interpreting a firm's financial reporting policy as a choice of precision (quot;qualityquot;) for the disclosed accounting earnings, I find evidence that the higher the proprietary costs, the lower the precision (quot;qualityquot;) of reported accounting earnings. This is consistent with analytical work in disclosure theory which suggests that, ceteris paribus, as the proprietary cost of disclosure increases, the quality of disclosure decreases.
Book Synopsis Quality of Financial Reporting Choice by : Daniel A. Cohen
Download or read book Quality of Financial Reporting Choice written by Daniel A. Cohen and published by . This book was released on 2004 with total page 208 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this dissertation, I investigate the determinants and economic consequences associated with firms' financial reporting choices. Recognizing the endogeneity associated with these choices, I find evidence of a positive association between investors' demands for firm-specific information and financial reporting quality. I also find that higher proprietary costs are associated with a lower quality of financial information. As for the economic consequences, the evidence suggests that firms with high quality financial reporting policies have reduced information asymmetries. However, after accounting for the endogeneity associated with the reporting quality choice, I find no significant evidence that firms choosing to provide financial information of higher quality enjoy a lower cost of equity capital. These results demonstrate the importance of explicitly modeling the endogeneity of financial reporting choices in investigating the associated economic consequences.
Book Synopsis Competition, Proprietary Costs of Financial Reporting and Financial Statement Comparability by : Scott Seavey
Download or read book Competition, Proprietary Costs of Financial Reporting and Financial Statement Comparability written by Scott Seavey and published by . This book was released on 2018 with total page 65 pages. Available in PDF, EPUB and Kindle. Book excerpt: Competitors often pay close attention to rivals' financial reports. For firms with high levels of proprietary information, competition may increase the costs of public disclosure. Theory suggests that such costs, which we refer to as the proprietary costs of financial reporting, may lead to strategic financial reporting. We find that financial statement comparability is decreasing in the proprietary costs of financial reporting. Our results are robust to the use of alternative measures of comparability and alternative measures of proprietary costs of financial reporting. Additionally, theory suggests that financial reports will contain stronger signals of managers' private information when information asymmetry is high. We show that the negative relation between the proprietary costs of financial reporting and financial statement comparability is stronger for firms with poorer information environments. Together, our findings suggest that through the discretion afforded in GAAP, managers of firms with high levels of proprietary information report in a way that reduces the comparability of their financial statements, particularly when information asymmetry is high.
Book Synopsis Does Information Risk Really Matter? An Analysis of the Determinants and Economic Consequences of Financial Reporting Quality by : Daniel A. Cohen
Download or read book Does Information Risk Really Matter? An Analysis of the Determinants and Economic Consequences of Financial Reporting Quality written by Daniel A. Cohen and published by . This book was released on 2008 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt: I investigate the determinants and economic consequences associated with financial reporting quality. I find evidence of a positive association between investors' demands for firm-specific information and financial reporting quality. In addition, the evidence suggests that higher proprietary costs (proxied by capital intensity, product market competition, and growth opportunities) are associated with a lower quality of financial information. Controlling for the firm-specific characteristics determining financial reporting quality, I find evidence of a negative association between firms' total risk and financial reporting quality. Decomposing total risk into a systematic component and an idiosyncratic one, the results imply that firms providing financial information of higher quality do not necessarily enjoy a lower cost of equity capital. However, a significant negative relation is documented between reporting quality and idiosyncratic risk. This suggests that the quality of accounting information cannot be characterized as an additional systematic priced risk factor, but rather as an idiosyncratic one, once the firm-specific characteristics determining information quality are controlled for. These results demonstrate the importance of explicitly controlling for the determinants of financial reporting quality when investigating the associated economic consequences and question recent empirical evidence on the association between reporting quality and the cost of equity capital.
Book Synopsis Proprietary Costs and Disclosure Substitution by : Mirko Stanislav Heinle
Download or read book Proprietary Costs and Disclosure Substitution written by Mirko Stanislav Heinle and published by . This book was released on 2020 with total page 72 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study develops and tests a simple model of voluntary disclosure where managers can choose to withhold (i.e., redact) information from mandatory disclosure. We consider a setting where mandatory disclosure is a disaggregated disclosure (e.g., a financial statement), voluntary disclosure is an aggregate disclosure (e.g., an earnings forecast), and the costs of each type of disclosure are distinct. In this setting, we show that concerns about the proprietary cost of mandatory disclosure motivate managers to withhold information from mandatory disclosure and substitute voluntary disclosure. We test our predictions using a comprehensive sample of mandatory disclosures where the SEC allows the firm to redact information that would otherwise jeopardize its competitive position. Consistent with our predictions, we find strong evidence that redacted mandatory disclosure is associated with greater voluntary disclosure.
Book Synopsis Financial Reporting and Product Markets by : Gil Sadka
Download or read book Financial Reporting and Product Markets written by Gil Sadka and published by . This book was released on 2011 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Financial reporting influences competing firms by revealing information about efficient organization. It therefore plays an important role in product markets, in addition to its well-known role in share, debt and labor markets. The paper investigates the relation between the cost of disclosure and degree of competition. The model indicates that as the degree of competition intensifies the cost of disclosure rises at first but then it starts to decline and becomes almost flat with respect to the degree of competition. This relation does not vary significantly when the model is extended to include cost uncertainty (regardless of whether the reporting decision was made ex post or ex ante). However, in an ex post setting including both cost uncertainty and learning between competitors, the relation between reporting decisions and degree of competition is positive (excluding the case of monopolies). The model further suggests that publication of financial reports increases social welfare. The paper briefly explores additional implications of its approach to proprietary costs, such as the relation between disclosure, development of capital markets and investment decisions.
Book Synopsis Quality of Segment Reporting by : Fatin Nur Syafiqa Anuar
Download or read book Quality of Segment Reporting written by Fatin Nur Syafiqa Anuar and published by . This book was released on 2014 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis An Analysis of the Proprietary Costs of Segment Reporting by : Cristi Anne Gleason
Download or read book An Analysis of the Proprietary Costs of Segment Reporting written by Cristi Anne Gleason and published by . This book was released on 1998 with total page 196 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis On the Need for Research on Financial Reporting and Changing Prices by : Financial Accounting Standards Board
Download or read book On the Need for Research on Financial Reporting and Changing Prices written by Financial Accounting Standards Board and published by . This book was released on 1981 with total page 20 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis The Impact of Increased Tax Return Reporting on Financial Statement Tax Disclosure Quality by : Michelle Kim Harding
Download or read book The Impact of Increased Tax Return Reporting on Financial Statement Tax Disclosure Quality written by Michelle Kim Harding and published by . This book was released on 2017 with total page 68 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study uses the 2010 implementation of IRS Schedule UTP (Uncertain Tax Position) to examine the impact of additional tax return reporting on financial statement tax disclosure quality. Using a hand-collected sample, I find that firms reduce the quality of their Financial Accounting Standards Board Interpretation No. 48 (FIN 48) disclosures for Accounting for Uncertainty in Income Taxes in response to increased proprietary costs of disclosure following the adoption of IRS Schedule UTP. Standard setters intended FIN 48 disclosures to benefit investors. Contrary to this intended outcome, I find that as tax return reporting increases, firms reduce discretionary FIN 48 disclosures, making public tax disclosures more opaque and less useful to tax authorities and other stakeholders. Thus, an unintended consequence of increased tax return reporting is lower financial statement tax disclosure quality that undermines standard setters' goals of transparency, relevance, and comparability in financial reporting of income taxes.
Book Synopsis Financial Reporting Handbook by : Michael R. Young
Download or read book Financial Reporting Handbook written by Michael R. Young and published by Aspen Publishers Online. This book was released on 2003 with total page 1824 pages. Available in PDF, EPUB and Kindle. Book excerpt: Never before has a single reference provided such quick access to every critical aspect of financial reporting. In addition to covering the new Sarbanes-Oxley legislation, SEC rules and regulations, and corporate governance standards promulgated by the Independence Standards Board and the AICPA at institutions such as New York Stock Exchange, NASDAQ, and the American Stock Exchange, the Financial Reporting Handbook tackles important underlying themes such as the centrality of the audit committee, the individual responsibility of executives, and the integrity of the outside auditor. Best of all, the Financial Reporting Handbook will be updated every quarter with the relevant laws and regulations that are developed and implemented.
Author :United States. Congress. House. Committee on Financial Services. Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises Publisher : ISBN 13 : Total Pages :294 pages Book Rating :4.F/5 ( download)
Book Synopsis Fostering Accuracy and Transparency in Financial Reporting by : United States. Congress. House. Committee on Financial Services. Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises
Download or read book Fostering Accuracy and Transparency in Financial Reporting written by United States. Congress. House. Committee on Financial Services. Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises and published by . This book was released on 2006 with total page 294 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Financial Reporting Discretion and Voluntary Disclosure by : Majella Percy
Download or read book Financial Reporting Discretion and Voluntary Disclosure written by Majella Percy and published by . This book was released on 2015 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The aim of this paper is to explain Australian Ramp;D capitalization and voluntary disclosure. It is argued that the discretionary choices available to management in Australia with respect to the accounting for and the disclosure of Ramp;D expenditure and activities can be explained by the reduction of information asymmetries and agency costs. The results confirm that three aspects of information asymmetry investigated are important in explaining the discretionary captialization of Ramp;D expenditure: research intensity; the use of Ramp;D financing arrangements; and the percentage of subsidiaries not wholly owned. Furthermore, research intensity, and the use of Ramp;D financing arrangements are significant in explaining voluntary disclosure of Ramp;D expenditure and activities. These results are robust to the inclusion of controls for other economic characteristics of the firm including share issue, size, accounting performance, leverage, proprietary costs and tax status.
Book Synopsis Financial Reporting Quality and Voluntary Disclosure by : William F. Floyd
Download or read book Financial Reporting Quality and Voluntary Disclosure written by William F. Floyd and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis is comprised of two essays that explore how investors' uncertainty over financial reporting quality influences firms' voluntary disclosures. I consider two shocks that cause investors to assign a higher likelihood of restatement and examine how managers respond using voluntary disclosures. Managers inform stakeholders of the firm through mandatory disclosures (e.g. financial statements) and voluntary disclosures (e.g. earnings forecasts, conference calls, press releases). Financial reporting quality represents the extent to which financial statements faithfully reflect the underlying economics of the firm, and therefore, how much stakeholders can learn from these mandatory disclosures alone. The focus of this thesis is on how managers use voluntary channels to inform stakeholders following shocks to investors' expectations of financial reporting quality.
Book Synopsis Essays on Financial Reporting Quality by : Yuequan Wang
Download or read book Essays on Financial Reporting Quality written by Yuequan Wang and published by . This book was released on 2012 with total page 264 pages. Available in PDF, EPUB and Kindle. Book excerpt: Because of the importance of financial reporting quality in capital market, I explore the determinants to financial reporting quality in my second essay, "Market power and accrual management". I examine whether a firm's competition status in product markets affects its financial reporting quality, measured as discretionary accrual. I argue that because firms with greater market power have a greater ability to set prices for their products, they have comparatively fewer incentives to manipulate earnings through accrual management. I use the Lerner index to measure product market power and asset-deflated absolute discretionary accruals to proxy the magnitude of accrual management. Using a large sample of firm-year observations from 1997 to 2007, I find that, as hypothesized, firms with greater market power tend to have lower levels of accrual management. The final essay, "Product market competition and audit fees", goes one-step further than the second. As noted in the second essay, product market competition affects a firm's financial reporting quality. However, financial reporting quality may not be the only factor auditors take into account when they decide what fees to charge a client. The last essay, therefore, empirically explores the inter- and intra- industry effect of product market competition on audit fees. Prior literature posits two contradictory predictions on the relation between product market competition and audit fees. On the one hand, firms in a competitive market are expected to face higher liquidity risk, distress risk, and liquidation risk, thus increasing auditors' assessments of a client's business risk. So, audit fees are expected to increase with industry competitiveness. On the other hand, it is often argued in prior literature that product market competition decreases information asymmetry and mitigates agency problems between shareholders and managers and increases the accuracy of financial reporting, thus decreasing auditors' assessments of a client's audit risk resulting in necessary audits. So auditors tend to charge lower fees on firms in a more competitive industry. The study, then, empirically tests the relation between product market competition and audit fees and finds that auditors charge higher fees on firms in a more competitive industry. It also finds that auditors charge lower fees on firms with greater market power within the same industry.
Book Synopsis Financial Reporting and Changing Prices by : Paul A. Griffin
Download or read book Financial Reporting and Changing Prices written by Paul A. Griffin and published by . This book was released on 1979 with total page 260 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Capital Market Implications of Earnings Quality by : Bianca Ahrens
Download or read book Capital Market Implications of Earnings Quality written by Bianca Ahrens and published by BoD – Books on Demand. This book was released on 2010 with total page 282 pages. Available in PDF, EPUB and Kindle. Book excerpt: In his speech from 1998 the former chairman of the United States Securities and Exchange Commission (SEC) Arthur Levitt pointed out that trust "is the bedrock of our capital markets" and that this must not be shaken by the erosion of earnings quality. He made clear that it is the challenge of the whole financial community to counteract such a development. This thesis deals with the question whether the importance of earnings for the capital market varies with its quality. The question arises, because in recent years a large number of firm scandals has shaken the trust in the reliability of reported earnings. In order to properly address the research questions, the literature on earnings quality definitions, quality measures as well as implications of earnings quality on capital markets is reviewed and critically discussed. The author investigates whether well known results concerning capital market implications of earnings quality remain stable for all measures considered. She answers the question of how earnings quality affects firm value, cost of equity capital, and the accuracy of analysts' forecasts taking into account the effects of determinants of earnings quality.
