Abstract

http://ssrn.com/abstract=803865
 
 

References (58)



 
 

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Do Managers Withhold Bad News?


S.P. Kothari


Massachusetts Institute of Technology (MIT) - Sloan School of Management

Susan Shu


Boston College - Carroll School of Management

Peter D. Wysocki


University of Miami - School of Business Administration


Journal of Accounting Research, Forthcoming
MIT Sloan Research Paper No. 4556-05

Abstract:     
In this study, we examine whether managers delay disclosure of bad news relative to good news. If managers accumulate and withhold bad news up to a certain threshold, but leak and immediately reveal good news to investors, then we expect the magnitude of the negative stock price reaction to bad news disclosures to be greater than the magnitude of the positive stock price reaction to good news disclosures. We present evidence consistent with this prediction. Our analysis suggests that management, on average, delays the release of bad news to investors.

Number of Pages in PDF File: 54

Keywords: Bad News, Conservatism, Disclosure

JEL Classification: G14, G30, K22, M41, M45, D82, M40

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Date posted: September 21, 2005 ; Last revised: April 27, 2012

Suggested Citation

Kothari, S.P. and Shu, Susan and Wysocki, Peter D., Do Managers Withhold Bad News?. Journal of Accounting Research, Forthcoming; MIT Sloan Research Paper No. 4556-05. Available at SSRN: http://ssrn.com/abstract=803865

Contact Information

S.P. Kothari (Contact Author)
Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )
E52-325
Cambridge, MA 02142
United States
617-253-0994 (Phone)
617-253-0603 (Fax)
Susan Shu
Boston College - Carroll School of Management ( email )
Boston College
140 Commonwealth Ave.
Chestnut Hill, MA 02167
United States
617-552-1759 (Phone)
Peter D. Wysocki
University of Miami - School of Business Administration ( email )
Department of Accounting - K/E 308
5250 University Drive
Coral Gables, FL 33146-6531
United States
305-284-8618 (Phone)
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