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This study examines whether investors value the timing and/or information of mandatory disclosures in a unique research setting of listed companies in Thailand.

The authors adopt an event-study based approach. Abnormal stock returns are calculated using an OLS market model to measure market reactions to three types of mandatory reports issued by listed Thai firms: financial statements, Form 56-1 and Form 56-2. These reports are released sequentially but contain overlapping information content. Multivariate regression models are employed to examine the market reactions to these regulatory reports and explore the characteristics of firms that affect the market response.

The stock market reacts differentially to these reports. The financial statements, which are filed the earliest and are the most concise, prompt the strongest reaction. Investors similarly react significantly to Form 56-1 and Form 56-2, although Form 56-2 provides additional information beyond Form 56-1. The market reactions to small firms are stronger. Collectively, equity investors focus on the timeliness of disclosures rather than the information disclosed in the mandatory reports.

The evidence provides support for ongoing regulatory initiatives aimed at improving the timeliness of mandatory disclosures in emerging economies.

Prior studies on disclosure regulation investigate either the effect of information content or the timing of mandatory disclosures in isolation. The authors differentiate the effect of information content from disclosure timing and extend the literature by suggesting that investors incrementally value timeliness of disclosures. Investors perceive the benefit of the timely release of quantitative information compared to subsequent narrative disclosures. Between Form 56-1 and Form 56-2, the earlier release of the narrative non-financial information is incrementally traded into share prices.

The purpose of this paper is to investigate the information content in letters to shareholders in terms of business content, tone and types of business vocabulary.

The study uses multiple regression models to test the information content concerning business content, tone, and types of business vocabulary in letters to shareholders. Two textual analyses in accounting research dictionaries are used. Loughran and McDonald’s (2011) dictionary is used as a scheme to identify the positive and negative words, and Kothari et al.’s (2009) dictionary is used to identify the business vocabulary.

Letters to shareholders contain incremental information for investors. First, the results show that the market reacts negatively to the content of these letters. The more that business content is disclosed, the lower the abnormal returns. It can be seen that investors catch additional information from letters to shareholders. Second, investors in negative unexpected earnings firms tend to not trust the concentration of positive tone in the letters. Third, some types of business vocabulary in the letters have an influence on investors’ decisions. In addition, larger amounts of business content are seen to be negatively related to firms’ future performance.

Due to the effect of the content of letters to shareholders, the Securities Exchange Commission may wish to consider the results of this study before setting new disclosure regulations. Specifically, some inside information might have a negative effect on market returns.

The study indicates that letters to shareholders are a disclosure venue between companies and investors, where investors react to certain business vocabulary. Some business words are associated with lower future performance. Therefore, the market reacts negatively when these words are reported in the letters.

The purpose of this paper is to investigate the relationship between voluntary disclosure of a statement of management's responsibility for the financial reports (MRF) and earnings management, both accrual and real earnings management, in firms listed on the Stock Exchange of Thailand (SET).

The samples in this study are selected from listed companies on the SET in the year 2009. The multiple regression are used to test hypotheses.

The results show that the inclusion of a MRF has no association with both discretionary accrual and real earnings management activities (i.e. sales manipulation, a decrease in discretionary expenditures, and overproduction). The findings from the study reveal that firms with or without the MRF manipulate their earnings in a similar manner.

The sample for the study includes Thai listed firms in the year 2009 only. The small sample size may limit the validity of generalizations from these conclusions.

Based on the results, the regulators will know that the voluntary disclosure of management responsibilities on the financial reports is an ineffective tool to control earnings management.

Like Sarbanes-Oxley Act 2002, a disclosure of management responsibilities on the financial reports should be required by the Securities and Exchange Commission of Thailand.

Investors will know that firms with or without the MRF manipulate their earnings in a similar manner. The voluntary disclosure of an MRF in Thailand does not guarantee earnings quality.