Did Accelerated Filing Requirements and Sox Section 404 Affect the Timeliness of 10-K Filings?
39 Pages Posted: 16 Aug 2010 Last revised: 7 May 2012
Date Written: May 7, 2012
This paper examines the effect of Sarbanes-Oxley provisions on 10-K filing delays. We find that tightened filing deadlines for accelerated and large accelerated filers are not associated with changes in the incidence of late filing; that Section 404 compliance does not affect filing timeliness for firms with effective internal controls; and that about half the firms with internal control weaknesses file late. As a consequence, many Section 404 material weaknesses trigger negative abnormal returns around late filing notifications. Lastly, market reactions to late filing notifications are more negative when management provides no meaningful explanation for the delay, consistent with incentives to withhold bad news.
Keywords: Form 10-K, Rule 12b-25, accelerated filing, SOX Section 404, internal controls
JEL Classification: G14, G18, K22, M41
Suggested Citation: Suggested Citation