Disclosure Timing and the Economic Role of Mandatory Reporting: Evidence from Managers’ Decisions to File Audited Reports Early

42 Pages Posted: 30 Apr 2012 Last revised: 29 Aug 2014

See all articles by Preeti Choudhary

Preeti Choudhary

University of Arizona, Eller College of Management

Kenneth J. Merkley

Indiana University - Kelley School of Business - Department of Accounting

Jason D. Schloetzer

Georgetown University - McDonough School of Business

Multiple version iconThere are 2 versions of this paper

Date Written: August 28, 2014

Abstract

We investigate how managers’ decisions to file audited financial reports prior to SEC reporting deadlines relate to the economic role of mandatory reporting. Contrary to the view that audited financial reports will be more informative when they are filed earlier, we find that managers file audited reports early when they have less informative disclosures. It is unlikely that this result is due to managers filing reports early in a manner that impairs their potential to be informative; we find that early reports are more reliable and are similar to on-time reports in terms of year-over-year content revision. We further find that the percentage of information in the report relative to total information is lower for early reports, consistent with the greater preemption of information via other disclosure channels. Our collective evidence suggests that managers’ decisions to file early are more consistent with the confirmation role of reporting instead of the information role, suggesting that on-going regulatory efforts to enhance informativeness via shorter deadlines might not achieve the intended consequences.

Keywords: disclosure, information asymmetry, SEC periodic reports, regulation

Suggested Citation

Choudhary, Preeti and Merkley, Kenneth J. and Schloetzer, Jason D., Disclosure Timing and the Economic Role of Mandatory Reporting: Evidence from Managers’ Decisions to File Audited Reports Early (August 28, 2014). Georgetown McDonough School of Business Research Paper No. 2012-01; Johnson School Research Paper Series No. 14-2012. Available at SSRN: https://ssrn.com/abstract=2048702 or http://dx.doi.org/10.2139/ssrn.2048702

Preeti Choudhary (Contact Author)

University of Arizona, Eller College of Management ( email )

School of Accountancy
Tucson, AZ 85721
United States

Kenneth J. Merkley

Indiana University - Kelley School of Business - Department of Accounting ( email )

1309 E. 10th Street
Bloomington, IN 47405
United States

Jason D. Schloetzer

Georgetown University - McDonough School of Business ( email )

3700 O Street, NW
Washington, DC 20057
United States
202-687-2672 (Phone)

HOME PAGE: http://explore.georgetown.edu/people/jds99/?PageTemplateID=319

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