Regulation-Induced Disclosures: Is 'More' Actually 'Less'?

67 Pages Posted: 4 Mar 2016

See all articles by Joost Impink

Joost Impink

University of Florida

Mari Paananen

School of Business, Economics and Law, University of Gothenburg; University of Gothenburg - Department of Accounting and Finance

Annelies Renders

Maastricht University

Date Written: March 4, 2016

Abstract

Regulators and practitioners have expressed concerns that accounting disclosures have become too much and too complex resulting in negative consequences for companies and financial statement users. We investigate whether more regulation-induced disclosures are associated with more effort to prepare and use financial statements. We create an index measuring firms’ exposure to regulation-induced disclosures. We show that a higher index is associated with longer 10-Ks, a longer reporting delay and higher audit fees. A higher index is also associated with fewer analysts following the firm, lower analyst accuracy and a higher dispersion. Our findings suggest that increases in regulation-induced disclosures have unintended consequences.

Keywords: Accounting disclosures, regulation, information overload, textual analysis, analysts

JEL Classification: G14, M41, M48

Suggested Citation

Impink, Joost and Paananen, Mari and Paananen, Mari and Renders, Annelies, Regulation-Induced Disclosures: Is 'More' Actually 'Less'? (March 4, 2016). Available at SSRN: https://ssrn.com/abstract=2742059 or http://dx.doi.org/10.2139/ssrn.2742059

Joost Impink

University of Florida ( email )

PO Box 117166
336 GER
Gainesville, FL 32611
United States

Mari Paananen (Contact Author)

School of Business, Economics and Law, University of Gothenburg ( email )

Vasagatan 1
Gothenburg
Sweden

University of Gothenburg - Department of Accounting and Finance ( email )

Göteborg
Sweden

Annelies Renders

Maastricht University ( email )

P.O. Box 616
Maastricht, 6200MD
Netherlands

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
251
Abstract Views
1,723
rank
153,922
PlumX Metrics