The Usefulness of Historical Accounting Reports
Michael S. Drake
Brigham Young University - Marriott School
Darren T. Roulstone
Ohio State University (OSU) - Fisher College of Business
Jacob R. Thornock
Brigham Young University
Journal of Accounting & Economics (JAE), Forthcoming
In this study we investigate the usefulness of historical accounting 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 contextualizes and conditions information released in the current period. Using a novel dataset that tracks user requests for accounting reports stored in the SEC EDGAR database, we find that requests for historic reports during the fiscal year are positively associated with financial reporting complexity and that requests around earnings announcements are positively associated with accounting discretion and negative earnings shocks (particularly for conservative firms). Finally, we find that daily requests for historical reports are positively associated with 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: 48
Keywords: EDGAR, information acquisition, usefulness, financial reports
JEL Classification: G12, G14, M41
Date posted: June 13, 2012 ; Last revised: December 10, 2015
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