The Effects of Cross-Border Cooperation on Disclosure Enforcement and Earnings Attributes
53 Pages Posted: 11 Jun 2020 Last revised: 15 Jun 2020
Date Written: May 11, 2020
This study tests for changes in U.S.-listed foreign firms’ financial reporting properties and transparency when their home market regulators enter an arrangement that facilitates enforcement cooperation with the Securities and Exchange Commission. This arrangement—the International Organization of Securities Commissions’ Multilateral Memorandum of Understanding Concerning Consultation and Cooperation and the Exchange of Information (MMoU)—has explicit disclosure-related provisions. I show that the MMoU is associated with improvements across various measures of accounting properties and transparency. Collectively, the findings help resolve enduring questions about why the earnings quality of U.S.-listed foreign firms diverged from that of U.S. firms during pre-MMoU periods.
Keywords: information sharing, regulatory coordination, enforcement, SEC, cross-list, bonding
JEL Classification: K22, G38, F22, F23, F59, M48
Suggested Citation: Suggested Citation