Responsive Enforcement Strategy and Corporate Compliance with Disclosure Regulations

49 Pages Posted: 27 Jan 2016

See all articles by Ka Wai (Stanley) Choi

Ka Wai (Stanley) Choi

Australian National University (ANU) - School of Accounting & Business Information Systems

Xiaomeng Chen

Macquarie University - Faculty of Business and Economics

Sue Wright

University of Newcastle; UTS Business School; Financial Research Network (FIRN)

Hai Wu

Australian National University (ANU) - College of Business and Economics

Date Written: January 19, 2016

Abstract

We investigate the role of enforcement strategy in improving firms’ compliance with corporate disclosure regulations. We find that a responsive enforcement strategy developed by the Australian corporate and financial markets regulator, the Australian Securities and Investments Commission (ASIC), yielded significant improvements in analysts’ information environment and market liquidity over the period when a series of additional sanctions were progressively introduced. We conclude that the design and implementation of an appropriate enforcement strategy is an important determinant of the effectiveness of public enforcement of securities laws.

Keywords: Enforcement strategy, disclosure regulation, analyst forecasts, liquidity

JEL Classification: G18, K22, M41

Suggested Citation

Choi, Ka Wai and Chen, Xiaomeng and Wright, Sue and Wu, Hai, Responsive Enforcement Strategy and Corporate Compliance with Disclosure Regulations (January 19, 2016). Available at SSRN: https://ssrn.com/abstract=2722923 or http://dx.doi.org/10.2139/ssrn.2722923

Ka Wai Choi

Australian National University (ANU) - School of Accounting & Business Information Systems ( email )

Canberra
Australia

Xiaomeng Chen

Macquarie University - Faculty of Business and Economics ( email )

North Ryde
Sydney, New South Wales 2109
Australia

Sue Wright

University of Newcastle ( email )

University Drive
Callaghan, NSW 2308
Australia

UTS Business School ( email )

Sydney
Australia

Financial Research Network (FIRN) ( email )

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

Hai Wu (Contact Author)

Australian National University (ANU) - College of Business and Economics ( email )

Canberra
Australia
261253586 (Phone)

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