The Usefulness of Historical Accounting Reports

48 Pages Posted: 13 Jun 2012 Last revised: 10 Dec 2015

Michael S. Drake

Brigham Young University - Marriott School

Darren T. Roulstone

Ohio State University (OSU) - Fisher College of Business

Jacob R. Thornock

Brigham Young University

Date Written: November 2015

Abstract

In this study we investigate the usefulness of historical accounting reports (10-Ks and 10-Qs) by examining four settings where we expect investors to acquire historical reports in order to obtain qualitative and quantitative information that contextualizes and conditions information released in the current period. Using a novel dataset that tracks user requests for accounting reports stored in the SEC EDGAR database, we find that requests for historic reports during the fiscal year are positively associated with financial reporting complexity and that requests around earnings announcements are positively associated with accounting discretion and negative earnings shocks (particularly for conservative firms). Finally, we find that daily requests for historical reports are positively associated with shocks to firm value (particularly negative shocks). Overall, our evidence suggests that historical reports make up an important component of the information mosaic assembled by investors.

Keywords: EDGAR, information acquisition, usefulness, financial reports

JEL Classification: G12, G14, M41

Suggested Citation

Drake, Michael S. and Roulstone, Darren T. and Thornock, Jacob R., The Usefulness of Historical Accounting Reports (November 2015). Journal of Accounting & Economics (JAE), Forthcoming. Available at SSRN: https://ssrn.com/abstract=2083812 or http://dx.doi.org/10.2139/ssrn.2083812

Michael S. Drake (Contact Author)

Brigham Young University - Marriott School ( email )

United States

Darren T. Roulstone

Ohio State University (OSU) - Fisher College of Business ( email )

2100 Neil Avenue
Columbus, OH 43210-1144
United States

Jacob Thornock

Brigham Young University ( email )

Provo, UT 84602
United States
8014220828 (Phone)

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