Voluntary Disclosure of Balance Sheet Information in Quarterly Earnings Announcements
35 Pages Posted: 10 Jun 2000
Date Written: December 2001
We investigate a pervasive voluntary disclosure practice ? managers including balance sheets with quarterly earnings announcements. Consistent with expectations, we find that managers voluntarily disclose balance sheets when current earnings are relatively less informative, or when future earnings are relatively more uncertain. Specifically, balance sheet disclosures are more likely among firms: (1) in high technology industries; (2) reporting losses; (3) with larger forecast errors; (4) engaging in mergers or acquisitions; (5) that are younger; and (6) with more volatile stock returns. This is consistent with managers disclosing balance sheets in response to investor demand for value relevant information to supplement earnings.
Keywords: Capital markets, voluntary disclosure
JEL Classification: M41, D82, G12
Suggested Citation: Suggested Citation