When are concurrent quarterly reports useful for investors? Evidence from ASC 606

• 成果类型: Article
• 署名作者: Glaze, Jesse L. L.; Skinner, A. Nicole; Stephan, Andrew
• 署名单位: University System of Georgia; University of Georgia; University of Colorado System; University of Colorado Boulder
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-022-09744-7
• 发表日期: 2024
• 页码: 1360-1406
• 关键词: information uncertainty; earnings announcements; price; volatility; disclosure; accruals; QUALITY; volume

摘要

Prior research suggests that quarterly reports released concurrently with earnings depress trading due to information overload. In this study, we predict that concurrent reports help investors trade when they face uncertainty about how to interpret earnings news. We rely on the implementation of ASC 606 as a quasi-exogenous increase in uncertainty about how to trade in response to earnings news. Specifically, we find that when uncertainty is high in the first quarter of ASC 606 implementation, 10-Qs released concurrently with earnings are associated with increased trading around the earnings announcement. We find the relation is more pronounced when investors face greater uncertainty about earnings and when firms increase disclosure in their revenue recognition footnote. We also find some evidence that our results hold in a broader sample of accounting standard changes and generalize to other proxies for investor uncertainty. Our results suggest that concurrent quarterly reports are informative to investors when uncertainty about earnings is especially high.