Corporate Disclosure Quality and Properties of Analysts' Information Environment

Posted: 22 Sep 2003  

Donal Byard

City University of New York (CUNY) - Stan Ross Department of Accountancy

Kenneth W. Shaw

University of Missouri at Columbia - School of Accountancy

Multiple version iconThere are 2 versions of this paper

Abstract

This study examines how the quality of corporate disclosures impacts the precision of information that financial analysts incorporate into their forecasts of upcoming annual earnings. Our empirical measures distinguish between the precision of individual analysts' common and idiosyncratic (private) information, and between the quality of firms' public disclosures and private communications with analysts. We find that higher quality disclosures increase the precision of individual analysts' common and idiosyncratic information. These findings are due to higher quality annual and quarterly accounting disclosures. In contrast, we find no evidence that the quality of private communications between analysts and management affects the precision of analysts' common or idiosyncratic information.

Keywords: disclosure quality, analysts' forecasts, common information, idiosyncratic information, BKLS model

JEL Classification: G14, G24, G29, M41, M45

Suggested Citation

Byard, Donal and Shaw, Kenneth W., Corporate Disclosure Quality and Properties of Analysts' Information Environment. Journal of Accounting, Auditing and Finance, Summer 2003. Available at SSRN: https://ssrn.com/abstract=440860

Donal A. Byard (Contact Author)

City University of New York (CUNY) - Stan Ross Department of Accountancy ( email )

One Bernard Baruch Way, Box B12-225
New York, NY 10010
United States
646-312-3187 (Phone)
646-312-3161 (Fax)

Kenneth W. Shaw

University of Missouri at Columbia - School of Accountancy ( email )

420 Cornell Hall
Columbia, MO 65211
United States
573-882-5939 (Phone)
573-882-2437 (Fax)

Paper statistics

Abstract Views
1,273