The Role of Accounting Information in an Era of Fake News

Journal of Accounting and Economics, 2024[10.1016/j.jacceco.2024.101764]

70 Pages Posted: 3 Jan 2025

See all articles by Betty Liu

Betty Liu

Indiana University - Kelley School of Business - Department of Accounting

Austin Moss

University of Colorado at Boulder

Date Written: December 18, 2024

Abstract

We offer empirical evidence on the role of accounting information in shaping the incentives to produce fake news. We document that fake news authors strategically (1) publish their articles near earnings announcements, leveraging the widespread market attention these events attract, and (2) within the near-announcement window, avoid publishing post-announcement when investors are less susceptible to fake news due to the disclosure of accounting information. In extending our analyses to the broader accounting information environment, we find that fake news authors are less likely to target firms with more robust accounting information and elicit lower market reactions when doing so. These results highlight both ex-ante and ex-post roles that accounting information plays in safeguarding firms from financial disinformation.

Keywords: Fake News, Seeking Alpha, Financial Disinformation, Accounting Information

JEL Classification: D82, D83, G14, M41

Suggested Citation

Liu, Betty and Moss, Austin, The Role of Accounting Information in an Era of Fake News (December 18, 2024). Journal of Accounting and Economics, 2024[10.1016/j.jacceco.2024.101764], Available at SSRN: https://ssrn.com/abstract=5078267

Betty Liu (Contact Author)

Indiana University - Kelley School of Business - Department of Accounting ( email )

1309 E. 10th Street
Bloomington, IN 47405
United States

Austin Moss

University of Colorado at Boulder ( email )

Boulder, CO CO 80309
United States

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