Information in Mandatory and Voluntary Earnings Announcement Date Forecasts
58 Pages Posted: 23 Apr 2018 Last revised: 15 Jul 2019
Date Written: July 13, 2019
We address whether mandatory forecasts of earnings announcement dates are informative and what are the informational tradeoffs between mandatory and voluntary forecasts. We find mandatory forecasts in China predict actual earnings announcement dates and yet-to-be-announced firm performance, and the market reacts to the initial and revised forecasts accordingly. Regarding informational tradeoffs we find the following. The mandatory forecasts are informative, even by firms less likely to issue a voluntary forecast. This information is unavailable in a voluntary regime. The act of US voluntary forecasting and its timing each reveals information incremental to the forecasted announcement date, both of which are unavailable in a mandatory regime. Perhaps surprisingly, US voluntary and China mandatory forecasts convey a similar amount of earnings news, which is noteworthy because the China forecasts are considerably more timely, and this finding suggests the amount of information in the act and timing of voluntary forecasts is small.
Keywords: forecasts of earnings announcement dates, mandatory forecasting, private information precision, voluntary disclosure, informational tradeoffs
JEL Classification: D84, G14, M48
Suggested Citation: Suggested Citation