Do Voluntary CSR Reports Affect Earnings Informativeness?

50 Pages Posted: 16 Dec 2014 Last revised: 20 May 2017

See all articles by Stephanie Cheng

Stephanie Cheng

Tulane University

Aida Sijamic Wahid

University of Toronto - Accounting; University of Toronto - Rotman School of Management

Date Written: March 27, 2017

Abstract

This study examines whether voluntary issuance of stand-alone CSR reports affects the informativeness of earnings information. We find that the first-time voluntary adoption of CSR reporting is associated with higher subsequent earnings response coefficients, suggesting that CSR reporting improves earnings informativeness. Our cross-sectional tests show that the content of CSR reports matters; CSR reports only improve the informativeness of earnings to the extent that they address key firm-specific business risks of concerned by investors and stakeholders, which could threaten firms’ sustainability. The findings are consistent with the notion that CSR reports enhance earnings informativeness by helping investors assess earnings persistence.

Keywords: CSR Disclosure; Earnings Informativeness; Voluntary Disclosure; Earnings Persistence

JEL Classification: M41

Suggested Citation

Cheng, Stephanie and Wahid, Aida Sijamic, Do Voluntary CSR Reports Affect Earnings Informativeness? (March 27, 2017). 2015 Canadian Academic Accounting Association (CAAA) Annual Conference. Available at SSRN: https://ssrn.com/abstract=2537485 or http://dx.doi.org/10.2139/ssrn.2537485

Stephanie Cheng (Contact Author)

Tulane University ( email )

6823 St Charles Ave
New Orleans, LA 70118
United States

Aida Sijamic Wahid

University of Toronto - Accounting ( email )

105 St George St
Toronto, ON M5S 3E6
Canada

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

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