How Frequent Financial Reporting Can Cause Managerial Short-Termism: An Analysis of the Costs and Benefits of Increasing Reporting Frequency

CFA Digest ◽  
2014 ◽  
Vol 44 (11) ◽  
Author(s):  
Imrith Ramtohul
Keyword(s):  
Financial Reporting ◽  
Costs And Benefits ◽  
Reporting Frequency ◽  
Short Termism

Interim Reporting Frequency and the Mispricing of Accruals

2018 ◽  
Vol 32 (3) ◽  
pp. 29-47
Author(s):  
Shou-Min Tsao ◽  
Hsueh-Tien Lu ◽  
Edmund C. Keung
Keyword(s):  
Financial Reporting ◽  
Stock Prices ◽  
Data Availability ◽  
Financial Reports ◽  
Regulatory Changes ◽  
Sample Composition ◽  
Reporting Frequency ◽  
Over Time ◽  
Jel Classifications ◽  
Accrual Mispricing

SYNOPSIS This study examines the association between mandatory financial reporting frequency and the accrual anomaly. Based on regulatory changes in reporting frequency requirements in Taiwan, we divide our sample period into three reporting regimes: a semiannual reporting regime from 1982 to 1985, a quarterly reporting regime from 1986 to 1987, and a monthly reporting regime (both quarterly financial reports and monthly revenue disclosure) from 1988 to 1993. We find that although both switches (from the semiannual reporting regime to the quarterly reporting regime and from the quarterly reporting regime to the monthly reporting regime) hasten the dissemination of the information contained in annual accruals into stock prices and reduce annual accrual mispricing, the switch to monthly reporting has a lesser effect. Our results are robust to controlling for risk factors, transaction costs, and potential changes in accrual, cash flow persistence, and sample composition over time. These results imply that more frequent reporting is one possible mechanism to reduce accrual mispricing. JEL Classifications: G14; L51; M41; M48. Data Availability: Data are available from sources identified in the paper.

scholarly journals Financial Reporting Frequency and Managerial Learning from Stock Price

2020 ◽  
Author(s):  
Stephen A. Hillegeist ◽  
Asad Kausar ◽  
Arthur Gerald Kraft ◽  
You-il (Chris) Park
Keyword(s):  
Financial Reporting ◽  
Stock Price ◽  
Reporting Frequency

Depreciation of Airplanes and Garbage Trucks: Information Value and Fraud Prevention in Financial Reporting

2009 ◽  
Vol 24 (1) ◽  
pp. 105-107 ◽  
Author(s):  
Mary Beth Mohrman
Keyword(s):  
Waste Management ◽  
Earnings Management ◽  
Financial Reporting ◽  
Information Value ◽  
Costs And Benefits ◽  
Fraud Prevention

ABSTRACT: This assignment will provide you with a better understanding of the costs and benefits of management's use of judgment in financial reporting. First, you will look at the differences in depreciation policies among three firms in one industry (airlines). This provides an opportunity to examine why firms in the same industry might adopt different depreciation policies for similar assets. Then, you will read about Waste Management, a case in which managers manipulated depreciation estimates to manage earnings. Finally, you will be asked to evaluate a hypothetical proposal to require all firms owning similar assets to depreciate them over the same period. Analyzing depreciation differences between three airlines and speculating about the reasons for those differences will give you an appreciation for how firms can reveal information through their accounting policies. The Waste Management case shows how firms can abuse the discretion that GAAP allows. Assessing a proposal to require uniform depreciation estimates will provide an opportunity to analyze the tradeoff between information value and prevention of earnings management.

scholarly journals Financial Reporting Frequency and Corporate Innovation

2020 ◽  
Vol 63 (3) ◽  
pp. 501-530 ◽  
Author(s):  
Renhui Fu ◽  
Arthur Kraft ◽  
Xuan Tian ◽  
Huai Zhang ◽  
Luo Zuo
Keyword(s):  
Financial Reporting ◽  
Corporate Innovation ◽  
Reporting Frequency

Real Effects of Bankss Financial Reporting Frequency

2017 ◽  
Author(s):  
Karthik Balakrishnan ◽  
Aytekin Ertan
Keyword(s):  
Financial Reporting ◽  
Real Effects ◽  
Reporting Frequency
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