Decision Usefulness and Accelerated Filing Deadlines

Abstract:     
In this study, we examine the impact of the SEC’s decision to accelerate the filing of 10-Ks. The SEC argued that the accelerated deadline would increase the relevance of the disclosures, making the reports more useful. Opponents countered that the accelerated deadline would decrease the representational faithfulness of the disclosures, especially for smaller firms. We document a significant decrease in the 10-K market reaction for smaller firms as they accelerate from 90 to 75 days. For larger firms we find no significant change in the market reaction from 90 to 75 days. However, as these larger firms accelerate their 10-K deadline to 60 days, we find a significant increase in the market reaction. We also examine changes in reporting quality, shifts in information content, and changes in 10-K filing order and clustering and find results that are consistent with accelerated filing having significant impacts on representational faithfulness and relevance.

Number of Pages in PDF File: 50

Keywords: 10-K, SEC Disclosures, SOX, Disclosure Timing

JEL Classification: M41

Accepted Paper Series