Audited financial reporting and voluntary disclosure as complements: A test of the Confirmation Hypothesis

• 成果类型: Article
• 署名作者: Ball, Ray; Jayaraman, Sudarshan; Shivakumar, Lakshmanan
• 署名单位: University of Chicago; Washington University (WUSTL); University of London; London Business School
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2011.11.005
• 发表日期: 2012
• 关键词: value-relevance literature; price-signal relations; information-content; corporate governance; empirical-analysis; public disclosure; earnings; management; PRIVATE; MARKET

摘要

We examine the confirmation hypothesis that audited financial reporting and disclosure of managers' private information are complements, because independent verification of outcomes disciplines and hence enhances disclosure credibility. Committing to higher audit fees (a measure of financial statement verification) is associated with management forecasts that are more frequent, specific, timely, accurate and informative to investors. Because private information disclosure and audited financial reporting are complements, their economic roles cannot be evaluated separately. Our evidence cautions against drawing inferences exclusively from market reactions around announcement periods because audited financial reporting indirectly affects information released at other times and through other channels. (C) 2011 Elsevier B.V. All rights reserved.