150 Pages Posted: 6 Oct 2009 Last revised: 13 Aug 2010
Date Written: July 26, 2010
The corporate information environment develops endogenously as a consequence of information asymmetries and agency problems between investors, entrepreneurs, and managers. We provide a framework for analyzing the three main decisions that shape the corporate information environment in a capital markets setting: (1) managers’ voluntary reporting and disclosure decisions, (2) reporting and disclosures mandated by regulators, and (3) reporting decisions by third-party intermediaries (analysts). We review current research on disclosure regulation, information intermediaries, and the determinants and economic consequences of corporate disclosure and financial reporting decisions. We conclude that in the last ten years, research has generated a number of useful insights. Despite this progress, we call for researchers to consider interdependencies between the various decisions that shape the corporate information environment and highlight changes in the economic financial environment that raise new and interesting issues for researchers to address.
Keywords: Financial Reporting, Information Environment, Disclosure, Analyst Forecasts
JEL Classification: D80, G12, G14, M41, M43
Suggested Citation: Suggested Citation
Beyer, Anne and Cohen, Daniel A. and Lys, Thomas Z. and Walther, Beverly R., The Financial Reporting Environment: Review of the Recent Literature (July 26, 2010). Available at SSRN: https://ssrn.com/abstract=1483227 or http://dx.doi.org/10.2139/ssrn.1483227
By Ray Ball