Styles of Regulators: Evidence from the SEC’s Comment Letters

57 Pages Posted: 4 Nov 2018

See all articles by Truc (Peter) Do

Truc (Peter) Do

University of Queensland - Faculty of Business, Economics and Law

Huai Zhang

Nanyang Technological University (NTU)

Date Written: October 14, 2018

Abstract

Security regulations are enforced by SEC staff members. Conceptually, the regulations are to be uniformly enforced despite personal differences among SEC enforcers. We offer evidence to the contrary. Using the SEC’s comment letters as our setting, we find that SEC staff members exhibit unique personal “styles.” The effects of their personal styles on firms’ remediation costs, the contents of SEC comment letters, and the quality of firms’ financial reporting are surprisingly large. We manually collect information on SEC staff members. Our results demonstrate that female staff members are generally tougher reviewers and that CPA qualification matters. Overall, our study offers evidence that SEC staff members exhibit individual differences, and their styles shape firms’ financial reporting.

Keywords: Regulation enforcement, SEC, Comment letters, Fixed effects

JEL Classification: M41, M48

Suggested Citation

Do, Truc (Peter) and Zhang, Huai, Styles of Regulators: Evidence from the SEC’s Comment Letters (October 14, 2018). Available at SSRN: https://ssrn.com/abstract=3266002 or http://dx.doi.org/10.2139/ssrn.3266002

Truc (Peter) Do

University of Queensland - Faculty of Business, Economics and Law ( email )

4072 Brisbane, Queensland
Australia

Huai Zhang (Contact Author)

Nanyang Technological University (NTU) ( email )

Nanyang Business School
50 Nanyang Ave.
Singapore, 639798
Singapore
+65-6790-4097 (Phone)

Register to save articles to
your library

Register

Paper statistics

Downloads
36
Abstract Views
176
PlumX Metrics