The Usefulness of Historical Financial Reports
Michael S. Drake
Brigham Young University - Marriott School
Darren T. Roulstone
Ohio State University (OSU) - Fisher College of Business
Jacob R. Thornock
University of Washington - Michael G. Foster School of Business
In this study we investigate the usefulness of historical financial reports (10-Ks and 10-Qs) by examining four settings where we expect investors to acquire historical reports in order to obtain qualitative and quantitative information that provides context for information released in the current period. Using a novel dataset that tracks user requests for financial reports stored in the SEC EDGAR database, we find that requests for historic reports are positively associated with financial reporting complexity, accounting discretion, negative earnings shocks (particularly for conservative firms), and shocks to firm value (particularly negative shocks). Overall, our evidence suggests that historical reports make up an important component of the information mosaic assembled by investors.
Number of Pages in PDF File: 51
Keywords: EDGAR, information acquisition, usefulness, financial reports
JEL Classification: G12, G14, M41
Date posted: June 13, 2012 ; Last revised: February 6, 2015
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