Financial Reporting Quality and Proprietary Costs

39 Pages Posted: 8 Oct 2008

See all articles by Daniel A. Cohen

Daniel A. Cohen

Texas A&M University College Station

Multiple version iconThere are 2 versions of this paper

Date Written: June 2002

Abstract

This study investigates the association between proprietary costs and the quality offinancial reporting. Interpreting a firmâ¬"s financial reporting policy as a choice ofprecision (â¬Squalityâ¬?) for the disclosed accounting earnings, I find evidence that the higher the proprietary costs, the lower the precision (â¬Squalityâ¬?) of reported accounting earnings. This is consistent with analytical work in disclosure theory which suggests that, ceteris paribus, as the proprietary cost of disclosure increases, the quality of disclosure decreases.

Suggested Citation

Cohen, Daniel A., Financial Reporting Quality and Proprietary Costs (June 2002). NYU Working Paper No. DANIEL A. COHEN-07. Available at SSRN: https://ssrn.com/abstract=1280714

Daniel A. Cohen (Contact Author)

Texas A&M University College Station

Department of Accounting
College Station, TX 77843
United States

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