Does Filing Form 10-K Early Matter?
Kenneth J. Merkley
Cornell University - Samuel Curtis Johnson Graduate School of Management
Jason D. Schloetzer
Georgetown University - McDonough School of Business
July 5, 2012
Georgetown McDonough School of Business Research Paper No. 2012-01
Johnson School Research Paper Series No. 14-2012
A significant percentage of Form 10-Ks are filed well before the SEC reporting deadline (i.e., filing Form 10-K early). We present evidence that information asymmetry decreases when firms change to filing Form 10-K early and that this relation is greater for firms with low analyst following, poor financial performance, and prior earnings restatements. Our results persist after controlling for changes in firm performance, earnings announcement timing, disclosure content, and excluding firms with negative economic events in the reporting period. We use the SEC’s recent reduction in Form 10-K reporting deadlines as a quasi-natural experiment and find that information asymmetry decreases for firms that comply with the shortened deadline compared with firms that do not comply. We conclude that firms that change to filing Form 10-K early allocate significant resources to financial reporting, an interpretation supported by our finding that such firms have less frequent Form 10-K amendments and smaller amendment errors compared with other firms.
Number of Pages in PDF File: 45
Keywords: disclosure, information asymmetry, amendments to SEC periodic reports. management reportingworking papers series
Date posted: April 30, 2012 ; Last revised: November 1, 2012
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