The Timeliness of UK Private Company Financial Reporting: Regulatory and Economic Influences

43 Pages Posted: 8 May 2014 Last revised: 13 May 2014

See all articles by Mark Clatworthy

Mark Clatworthy

University of Bristol, Department of Accounting and Finance

Michael J. Peel

Cardiff University - Cardiff Business School

Multiple version iconThere are 2 versions of this paper

Date Written: May 7, 2014

Abstract

This paper investigates the effects of both regulation and economic demand on the timeliness of UK private companies’ accounting information. We study companies’ response to a one-month shortening of the statutory filing deadline and hypothesise that companies using accounting to communicate financial information to outside capital providers will be timelier in filing their accounts and less affected by the regulatory change than firms preparing accounts for tax and compliance purposes. Our results indicate that companies producing accounting information for reporting to outside investors publish their accounts significantly more quickly than those filing for compliance/tax reasons, though the change in regulation significantly affects both types of companies. We find a reduction in the average filing time, though the proportion of firms filing late increases after the regulatory change. In addition to incurring financial and non-financial penalties, filing after the statutory limit has important economic consequences because our results show that firms filing late have significantly lower credit ratings. We conclude that both regulatory and fundamental factors are important in private company financial reporting and that the two are sometimes interdependent.

Keywords: Private companies, Financial reporting, Timeliness, Late filings, Credit ratings

JEL Classification: M40, M4

Suggested Citation

Clatworthy, Mark A. and Peel, Michael J., The Timeliness of UK Private Company Financial Reporting: Regulatory and Economic Influences (May 7, 2014). Available at SSRN: https://ssrn.com/abstract=2433962 or http://dx.doi.org/10.2139/ssrn.2433962

Mark A. Clatworthy (Contact Author)

University of Bristol, Department of Accounting and Finance ( email )

School of Economics, Finance and Management
8 Woodland Road
Bristol, BS8 1TN
United Kingdom
+44(0)1173310914 (Phone)

Michael J. Peel

Cardiff University - Cardiff Business School ( email )

Cardiff
United Kingdom

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