The Effects of Regulation Fair Disclosure on Management Forecasts

44 Pages Posted: 20 Jun 2004

See all articles by Carla Carnaghan

Carla Carnaghan

University of Lethbridge - Faculty of Management

Ranjini Jha

University of Waterloo - School of Accounting and Finance

Abstract

We examine management forecasts to determine whether Regulation Fair Disclosure has improved the quality and quantity of public disclosures. Management forecasts are voluntary, provide earnings guidance and are highly sought by investors and analysts. We find that the information disclosed by managers has improved in terms of frequency, specificity and verifiable information provided. We also find that Regulation Fair Disclosure has reduced information asymmetry, and information leakage prior to the release of the MEF. We find no evidence of greater returns volatility. Our results suggest that generally Regulation Fair Disclosure has achieved one of its stated goals of providing a more level playing field to all investors

Keywords: Financial disclosure, management earnings forecasts, Regulation Fair Disclosure, capital markets

JEL Classification: G14, G29, M41, M45

Suggested Citation

Carnaghan, Carla and Jha, Ranjini, The Effects of Regulation Fair Disclosure on Management Forecasts. EFMA 2004 Basel Meetings Paper. Available at SSRN: https://ssrn.com/abstract=492662 or http://dx.doi.org/10.2139/ssrn.492662

Carla Carnaghan (Contact Author)

University of Lethbridge - Faculty of Management ( email )

4401 University Drive
Lethbridge, Alberta TIK 3M4
Canada
403 329-2351 (Phone)

Ranjini Jha

University of Waterloo - School of Accounting and Finance ( email )

200 University Avenue West
Waterloo, Ontario N2L 3G1 N2L 3G1
Canada

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