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1 – 10 of over 2000
Article
Publication date: 4 March 2019

Sherwood Lane Lambert, Kevin Krieger and Nathan Mauck

To the authors’ knowledge, this paper is the first to use Detail I/B/E/S to study directly the timeliness of security analysts’ next-year earnings-per-share (EPS…

Abstract

Purpose

To the authors’ knowledge, this paper is the first to use Detail I/B/E/S to study directly the timeliness of security analysts’ next-year earnings-per-share (EPS) estimates relative to the SEC filings of annual (10-K) and quarterly (10-Q) financial statements. Although the authors do not prove a causal relationship, they provide evidence that the average time from firms’ filings of 10-Ks and 10-Qs to the release of analysts’ annual EPS forecasts during short timeframes (for example, 15-day timeframe from a 10-K’s SEC file date) subsequent to the 10-K and 10-Q filing dates significantly shortened with XBRL implementation and then remained relatively constant following implementation.

Design/methodology/approach

Using filing dates hand-collected from the SEC website for 10-Ks during 2009-2011 and filing dates for 10-Ks and 10-Qs during 2003-2014 input from Compustat along with analysts’ estimated values for next year EPS, actual estimated next year EPS realized and estimate announcement dates in Detail I/B/E/S, the authors study the days from 10-K and 10-Q file dates to announcement dates and the per cent errors for individual estimates during per- and post-XBRL eras.

Findings

The authors find that analysts are announcing next-year EPS forecasts significantly more frequently and in significantly shorter time in zero to 15 days immediately following 10-K and 10-Q file dates post-XBRL as compared to pre-XBRL. However, the authors do not find a significant change in forecast accuracy post-XBRL as compared to pre-XBRL.

Research limitations/implications

Because this study uses short timeframes immediately following the events (filings of 10-Ks and 10-Qs), the relationship between 10-Ks and 10-Qs with and without XBRL and improved forecast timeliness is strengthened. However, even this strengthened difference-in-difference methodology does not establish causality. Future research may determine whether XBRL or other factors cause the improved forecast timeliness the authors’ evidence.

Practical implications

This improved efficiency may become critical if financial statement reporting expands as a result of new innovations such as Big Data and continuous reporting. In the future, users may be able to electronically connect to financial statement data that firms are maintaining on a perpetual basis on the SEC website and continuously monitor and analyze the financial statement data dynamically in real time. If so, then unquestionably, XBRL will have played a critical role in bringing about this future innovation.

Originality/value

Whereas previous studies have utilized Summary IBES data to assess the impact of XBRL on analyst forecasts, the authors use Detail IBES to study the effects of XBRL adoption directly by measuring days from 10-K and 10-Q file dates in Compustat to each estimate’s announcement date recorded in IBES and by computing the per cent error using each estimate’s VALUE and ACTUAL recorded in Detail IBES. The authors are the first to evidence a significant shortening in average days and an increase in per cent of 30-day counts in the zero- to 15-day timeframe immediately following the fillings of 10-K s and 10-Qs.

Details

International Journal of Accounting & Information Management, vol. 27 no. 1
Type: Research Article
ISSN: 1834-7649

Keywords

Article
Publication date: 9 January 2020

Rakesh Bharati, Susan Crain and Shrikant Jategaonkar

The purpose of this paper is to examine whether the investor reaction to 10-K filings has changed since the implementation of Regulation Full Disclosure (FD) and the…

Abstract

Purpose

The purpose of this paper is to examine whether the investor reaction to 10-K filings has changed since the implementation of Regulation Full Disclosure (FD) and the Sarbanes–Oxley Act (SOX) and examine whether the market still underreacts to 10-K content and exhibits the continuation of filing day returns (FDRs) documented by You and Zhang (2009) after the passage of these regulations.

Design/methodology/approach

The sample consists of 39,270 10-K filings over the sample period of 1996 to 2012. Performance of portfolios created based on FDRs around 10-K filings is examined. Regression models are used for multivariate analysis. Carhart αs are obtained using the four-factor risk adjustment model.

Findings

By comparing investor reaction to 10-K filings pre- and post-regulation, the paper shows a significant change in stock price behavior since the implementation of FD and SOX. Analogous to Burks (2011), results suggest improved price efficiency around 10-K filings. In the long-run of up to one year following the filing, the continuation of FDRs documented by You and Zhang (2009) disappears post-2000, especially after the implementation of SOX. Overall findings suggest that investors price the information in 10-K filings significantly differently after FD and SOX than before.

Research limitations/implications

The sample ends in 2012. Therefore, this study does not examine the implications of the Dodd-Frank Act.

Originality/value

The paper contributes to the literature related to the impact of FD and SOX and market reaction to filings of financial reports. The current literature documents that there is a continuation of FDRs up to a year. This paper shows that the continuation has disappeared since FD and SOX were implemented.

Details

Managerial Finance, vol. 46 no. 1
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 9 September 2011

Haifeng You and Xiao‐Jun Zhang

This study aims to examine whether limited attention leads to the market underreaction to earnings announcement and 10‐K filings.

Abstract

Purpose

This study aims to examine whether limited attention leads to the market underreaction to earnings announcement and 10‐K filings.

Design/methodology/approach

This is an empirical study involving statistical analysis of a large sample of data, obtained from Compustat, CRSP and Xignite Inc. Both portfolio analysis and multivariate regressions are used in hypotheses testing.

Findings

The following key findings are presented in the paper. First, we show that among large firms, investors under‐react more to the information contained in 10‐K filings than earnings announcements. Second, underreaction to earnings announcements tends to be stronger for small firms than large firms. Third, we find that companies report their earnings and 10‐Ks earlier when there is a higher demand for such information, and document a negative relationship between the degree of underreaction and the timeliness of such information release. Finally, we show that the recent ruling by SEC to accelerate 10‐K filing has little impact on the degree of investors' underreaction to 10‐K information.

Research limitations/implications

The findings of this study suggest that investors' failure to devote enough attention to an economic event leads to underreaction, and the degree of underreaction is negatively correlated with the amount of investor attention.

Practical implications

Investors need to periodically reassess the informational contents of economic events, and allocate their attention accordingly, in order to avoid underreaction.

Originality/value

This study analyzes and the roles of limited attention in determining the degree of investor underreaction to earnings announcement and 10‐K filings. The comparison of the two related but distinct financial reporting events yields interesting insights.

Details

China Finance Review International, vol. 1 no. 4
Type: Research Article
ISSN: 2044-1398

Keywords

Article
Publication date: 19 November 2019

Guang Ma

This study examines the information content of firms’ operations-related disclosures (ORDs) and the importance of these disclosures as an information source to stock…

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Abstract

This study examines the information content of firms’ operations-related disclosures (ORDs) and the importance of these disclosures as an information source to stock markets relative to other commonly examined sources of information. I find that ORDs constitute a large portion of corporate press releases. These disclosures are associated with significant stock price reactions and trading volume. The stock price reactions to ORDs are greater than the reactions to 10-K/Q reports and are of similar magnitudes to the reactions to 8-K filings. On average, ORDs explain variation in firms’ quarterly returns to a similar degree as management earnings forecasts and 10-K/Q reports for the full sample and to a greater degree for small firms and firms with lower earnings quality.

Details

Journal of Accounting Literature, vol. 43 no. 1
Type: Research Article
ISSN: 0737-4607

Keywords

Article
Publication date: 14 June 2018

Tiffany Chiu, Feiqi Huang, Yue Liu and Miklos A. Vasarhelyi

Prior studies suggest that non-timely 10-Q filings indicate higher potential risks than non-timely 10-K filings. Furthermore, larger audit firms tend to be more…

Abstract

Purpose

Prior studies suggest that non-timely 10-Q filings indicate higher potential risks than non-timely 10-K filings. Furthermore, larger audit firms tend to be more risk-averse and conservative about reporting. Inspired by these research streams, this paper aims to investigate the influence of non-timely 10-Q filings on audit fees and the impact of audit firm size on this association.

Design/methodology/approach

The cross-sectional audit fee regression model used in this study is similar to that used in prior audit fee research (Simunic, 1980; Francis et al., 2005; Hay et al., 2006; Wang et al., 2013). The model includes the following five major characteristics that would influence auditors’ fee decisions: auditee size (LNAT), complexity (REIVAT, FOREIGN, SEG), financial condition (LOSS, ROA, GROWTH, ZSCORE), special events (ICW, RESTATE, INITIAL, GC) and auditor type (BIG4). To examine the effect of non-timely 10-Q filings on audit fees, the variable NT10Q is included in the audit fee model.

Findings

The results indicate that when both non-timely 10-K and non-timely 10-Q filings are included in the regression model, only non-timely 10-Q filings are significantly associated with higher audit fees, suggesting that the presence of non-timely 10-Q filings signals more serious underlying problem than non-timely 10-K filings in the audit fees decision processes. In addition, we find that audit fees for firms audited by Big 4 auditors are 26.4 per cent higher when those firms file non-timely 10-Q reports, whereas there is no significant association between non-timely 10-Q filings and audit fees for firms audited by non-Big 4 auditors.

Practical implications

As no attention has been paid to the investigation of the impact of non-timely 10-Q filings on audit fees, with the aim of filling the gap of this specific research area, this study examines the association between non-timely 10-Q filings and audit fees and the influence of audit firm size on this association.

Originality/value

The contribution of this paper is threefold: first, it is the first study to examine the association between non-timely 10-Q filings and audit fees. The results show that non-timely 10-Q filings are a better and earlier indicator of audit risk than non-timely 10-K filings. Second, the results reveal that the relationship between non-timely 10-Q filings and audit fees is affected by audit firm size. Specifically, Big 4 auditors tend to charge higher audit fees in the presence of non-timely 10-Q filings, reflecting that they are more sensitive to audit risk than smaller audit firms are. Third, an examination of the quarterly effect of non-timely 10-Q filings on audit fees indicates a stronger effect from the first quarter’s non-timely 10-Q filings, compared to the second or third quarter.

Details

Managerial Auditing Journal, vol. 33 no. 5
Type: Research Article
ISSN: 0268-6902

Keywords

Article
Publication date: 1 January 2006

Marlin R.H. Jensen, Beverly B. Marshall and William N. Pugh

This study seeks to investigate whether a firm's financial disclosure size can help investors predict performance.

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Abstract

Purpose

This study seeks to investigate whether a firm's financial disclosure size can help investors predict performance.

Design/methodology/approach

Controlling for size and industry, the relationship between financial disclosure size and subsequent stock performance for all Standard and Poor's (S and P) 500 firms over a seven‐year period is examined.

Findings

It is found that firms with smaller 10‐Ks tend to have better subsequent performance relative to their industries. However, the findings suggest that the performance explanation may not lie in the size of the 10‐K itself. Firms with smaller 10‐Ks tend to perform better because they are smaller in terms of total assets and more focused, with fewer business segments.

Research limitations/implications

While the study is limited to examination of S and P 500 firms, no consistent evidence is found of a relation between changes in a firm's disclosure size and future performance changes.

Practical implications

The results suggest that more disclosure relative to a firm's size is not necessarily bad. Investors attempting to predict future firm performance cannot use the firm's disclosure size alone.

Originality/value

This paper extends two recent Merrill Lynch studies that appear to contradict the extant financial literature's view that increased disclosure reduces the informational asymmetry problem. While the results confirm the findings of these studies, they suggest that the performance explanation may not lie in the size of the 10‐K itself.

Details

Managerial Finance, vol. 32 no. 1
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 3 June 2021

Jun Guo, Sungsoo Kim, Yang Yu and Jung Yeun (June) Kim

The study aims to understand the role of accountant in corporate social responsibility (CSR) practice.

Abstract

Purpose

The study aims to understand the role of accountant in corporate social responsibility (CSR) practice.

Design/methodology/approach

In this study, the authors examine whether and how chief financial officer (CFO) accounting expertise and previous work experience influence voluntary CSR disclosure, using textual analysis and natural language processing (NLP) techniques. The authors find that firms' CFOs with accounting expertise disclose more CSR issues in their 10-K reports. Overall, this study provides evidence of the impact of CFOs' professional and personal attributes on voluntary CSR disclosure in corporate annual reports. This study has important implications to investors and policy makers in the context of CSR disclosure regulations in annual reports.

Findings

Overall, this study provides evidence of the impact of CFOs' professional and personal attributes on voluntary CSR disclosure in corporate annual reports. This study has important implications to practitioners and policy makers in the context of CSR disclosure regulations in annual reports.

Research limitations/implications

There is an inherent limitation of textual analysis as the tool tries to read key words from the text.

Practical implications

This finding is useful for policy maker and investors as CSR is known to have impact on the share price.

Originality/value

This paper is the first attempt to find out accountants' role in CSR activities, which has not been examined in the prior literature.

Details

Journal of Applied Accounting Research, vol. 22 no. 5
Type: Research Article
ISSN: 0967-5426

Keywords

Article
Publication date: 3 May 2022

Jun Guo and Yang Yu

The purpose of this paper is to study the relationships among the presence of corporate social responsibility (CSR) committee, politicians on CSR committee and CSR…

Abstract

Purpose

The purpose of this paper is to study the relationships among the presence of corporate social responsibility (CSR) committee, politicians on CSR committee and CSR disclosure in 10-Ks using data from S&P 500 firms during 2005–2013.

Design/methodology/approach

The authors manually check the information of CSR committees as well as committees with CSR/sustainability functions from proxy statements (DEF 14a). CSR disclosure from 10-Ks is obtained by using a Python library named Beautiful Soup 4 to clean the rough data from the raw format files from EDGAR.

Findings

The authors find that superior sustainability governance is associated with more voluntary CSR disclosure in their 10-K reports. More importantly, they find that CSR committee members with working experiences as politicians play an important role to improve CSR disclosure. In the robustness tests, they find that CSR committee and the politicians on CSR committee are also associated with high KLD CSR score ratings.

Practical implications

The finding in our paper that politicians on CSR committee can enhance CSR efforts may provide practical implications to some companies. Companies may consider inviting people who have political connections and experience to serve on CSR committees.

Originality/value

The authors find the presence of politicians on CSR committee is associated with CSR disclosure and CSR performance. That's new to the CSR governance literature and makes contributions to CSR disclosures and CSR committee expertise and skills.

Details

Asian Review of Accounting, vol. 30 no. 3
Type: Research Article
ISSN: 1321-7348

Keywords

Article
Publication date: 13 July 2021

Abdulsamed Tabak

The purpose of this paper is to improve transient response and dynamic performance of automatic voltage regulator (AVR).

Abstract

Purpose

The purpose of this paper is to improve transient response and dynamic performance of automatic voltage regulator (AVR).

Design/methodology/approach

This paper proposes a novel fractional order proportional–integral–derivative plus derivative (PIλDµDµ2) controller called FOPIDD for AVR system. The FOPIDD controller has seven optimization parameters and the equilibrium optimizer algorithm is used for tuning of controller parameters. The utilized objective function is widely preferred in AVR systems and consists of transient response characteristics.

Findings

In this study, results of AVR system controlled by FOPIDD is compared with results of proportional–integral–derivative (PID), proportional–integral–derivative acceleration, PID plus second order derivative and fractional order PID controllers. FOPIDD outperforms compared controllers in terms of transient response criteria such as settling time, rise time and overshoot. Then, the frequency domain analysis is performed for the AVR system with FOPIDD controller, and the results are found satisfactory. In addition, robustness test is realized for evaluating performance of FOPIDD controller in perturbed system parameters. In robustness test, FOPIDD controller shows superior control performance.

Originality/value

The FOPIDD controller is introduced for the first time to improve the control performance of the AVR system. The proposed FOPIDD controller has shown superior performance on AVR systems because of having seven optimization parameters and being fractional order based.

Details

COMPEL - The international journal for computation and mathematics in electrical and electronic engineering , vol. 40 no. 3
Type: Research Article
ISSN: 0332-1649

Keywords

Article
Publication date: 19 February 2018

Frerich Buchholz, Reemda Jaeschke, Kerstin Lopatta and Karen Maas

The purpose of this paper is to examine how CEO narcissism can be related to the usage of an abnormal optimistic tone in financial disclosures. Drawing on upper echelons…

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Abstract

Purpose

The purpose of this paper is to examine how CEO narcissism can be related to the usage of an abnormal optimistic tone in financial disclosures. Drawing on upper echelons theory, this paper suggests a link between CEO characteristics, such as narcissism, and accounting choices, such as optimistic financial reporting language.

Design/methodology/approach

To measure the narcissistic trait of a CEO, the study builds on a model using a set of 15 archival indicators. The usage of an abnormal optimistic tone is assessed quantitatively when looking at firms’ 10-K filings, where “abnormal” refers to tone that is unrelated to a firm’s performance, risk, and complexity. This approach allows for the use of firm-fixed effects for a sample of US listed firms over the period 1992-2012.

Findings

The results show that CEO narcissism is significantly positively related to abnormal optimistic tone in 10-K filings. If a highly abnormal optimistic tone is present, the level of CEO narcissism is positively related to the likelihood of future seasoned equity offerings and larger future investments in research and development.

Research limitations/implications

The findings are relevant for shareholders and stakeholders as well as auditors and legislators. All stakeholders should be aware of the overly optimistic reporting language resulting from CEO narcissism and need to make allowances for it when assessing firm performance based on financial disclosures.

Originality/value

This study is the first to show in a large-scale sample how CEO narcissism can be related to a firm’s use of optimistic language, and thus contributes to the question of how personality traits affect an organization’s financial reporting strategy.

Details

Accounting, Auditing & Accountability Journal, vol. 31 no. 2
Type: Research Article
ISSN: 0951-3574

Keywords

1 – 10 of over 2000