Individual Investors’ Attention to Accounting Information: Evidence from Online Financial Communities

Posted: 31 Mar 2020

See all articles by Alina Lerman

Alina Lerman

University of Connecticut - Department of Accounting

Multiple version iconThere are 2 versions of this paper

Date Written: March 24, 2020

Abstract

Online financial communities provide a unique opportunity to directly examine individual investors’ attention to accounting information on a large scale and in great detail. I analyze accounting-related content in large samples of Yahoo! message board posts and StockTwits and find investors pay attention to a range of accounting information, fixating particularly on earnings, cash, and revenues. Consistent with the expectation that investors react to relevant information events, I find accounting-related discussion elevated around the filings of earnings releases and 8-K reports, but the reaction to periodic reports is confined to small firms. I also find investors expand their acquisition of accounting information and processing efforts in poor information environments. Greater attention to accounting information at earnings releases does not appear to be meaningfully associated with better information processing.

Keywords: social media, individual investors, corporate disclosures, information environment

JEL Classification: D81, D83, G14, M41

Suggested Citation

Lerman, Alina, Individual Investors’ Attention to Accounting Information: Evidence from Online Financial Communities (March 24, 2020). Contemporary Accounting Research, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3564528

Alina Lerman (Contact Author)

University of Connecticut - Department of Accounting ( email )

School of Business
Storrs, CT 06269-2041
United States

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