Consequences of Interim Reporting: A Literature Review and Future Research Directions

European Accounting Review, forthcoming

50 Pages Posted: 4 Nov 2020 Last revised: 6 Jan 2021

See all articles by Peter Kajüter

Peter Kajüter

University of Münster - Accounting Center

Arne Lessenich

Chair of International Accounting, University of Muenster

Martin Nienhaus

Goethe University Frankfurt

Florian van Gemmern

University of Münster - Accounting Center

Date Written: October 6, 2020

Abstract

This study provides the first comprehensive literature review on interim reporting based on 112 papers published between 1961 and 2020. The review focuses on both the firm-specific consequences (capital market-based and real effects) and externalities of interim reporting. We analyze three primary interim reporting characteristics: (1) frequency, (2) contents, and (3) assurance. The review allows us to summarize the existing literature, reconcile different findings, identify trends in the literature, and present avenues for future research. We observe that investors perceive interim reports to be useful. However, no clear evidence exists for strong capital market-based benefits of higher reporting frequency, such as increases in liquidity. Instead, recent evidence even points to negative externalities of diverging reporting frequencies in terms of liquidity decreases for firms reporting at a lower frequency. Higher reporting frequency seems to imply stricter monitoring, especially in the absence of other effective monitoring mechanisms. Nonetheless, it can also induce myopic decision-making. More comprehensive reports convey more information at the costs of increases in reporting lags and processing time. Surprisingly, the current literature does not find that interim assurance leads to higher interim report quality.

Keywords: interim reporting, reporting frequency, interim assurance, literature review

JEL Classification: D82, G14, G18, M41, M42, M48

Suggested Citation

Kajüter, Peter and Lessenich, Arne and Nienhaus, Martin and van Gemmern, Florian, Consequences of Interim Reporting: A Literature Review and Future Research Directions (October 6, 2020). European Accounting Review, forthcoming, Available at SSRN: https://ssrn.com/abstract=3706255 or http://dx.doi.org/10.2139/ssrn.3706255

Peter Kajüter

University of Münster - Accounting Center ( email )

Universitätsstr. 14-16
Münster, 48143
Germany

Arne Lessenich

Chair of International Accounting, University of Muenster ( email )

Universitätsstraße 14-16
Münster, 48143
Germany

Martin Nienhaus (Contact Author)

Goethe University Frankfurt ( email )

Grüneburgplatz 1
Frankfurt am Main, 60323
Germany

Florian Van Gemmern

University of Münster - Accounting Center ( email )

Universitätsstr. 14-16
Münster, 48143
Germany

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