Do managers withhold bad news from credit rating agencies?

• 成果类型: Article
• 署名作者: Ahn, Minkwan; Bonsall, Samuel B.; Van Buskirk, Andrew
• 署名单位: University of Hong Kong; Pennsylvania Commonwealth System of Higher Education (PCSHE); Pennsylvania State University; Pennsylvania State University - University Park; University System of Ohio; Ohio State University
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-019-09496-x
• 发表日期: 2019
• 页码: 972-1021
• 关键词: DEFAULT SWAP; accounting conservatism; earnings management; INTERACTION TERMS; IMPACT; INFORMATION; disclosure; MARKETS; matter; tone

摘要

Research documents that managers, on average, withhold bad news and emphasize good news in their public disclosures. We ask whether the same is true in their private communications with credit rating agencies. We study how rating agencies anticipate and react to public information events as a function of their access to rated firms' private information. We show that, in terms of ratings downgrades, rating agencies exhibit relatively more anticipation and less reaction to negative (compared to positive) public information events when they have more access to private information. Our results are strongest when firms are most optimistic in their public disclosures and are not due to rating agencies focusing their efforts on downside risk. Overall, we find consistent evidence that rated firms provide less optimistic information to rating agencies in their private communications and that this information is reflected in credit ratings.