MD&A Disclosure and the Firm's Ability to Continue as a Going Concern

• 成果类型: Article
• 署名作者: Mayew, William J.; Sethuraman, Mani; Venkataehalam, Mohan
• 署名单位: Duke University
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/accr-50983
• 发表日期: 2015
• 页码: 1621-1651
• 关键词: FINANCIAL RATIOS; voluntary disclosure; Distress risk; bankruptcy; prediction; words; statements; management; text

摘要

This paper explores the role of textual disclosures in the Management, Discussion, and Analysis (MD&A) section of a firm's SEC 10-K filing in predicting a firm's ability to continue as a going concern. Using a sample of firms that filed for bankruptcy between 1995 and 2012 to identify firms that cease as a going concern, we find that both management's opinion about going concern reported in the MD& A and the linguistic tone of the MD& A together provide significant explanatory power in predicting whether a firm will cease as a going concern. Moreover, the predictive ability of MD& A disclosure is incremental to financial ratios, market-based variables, and even the auditor's going concern opinion. We also find that the incremental predictive ability of MD& A disclosures extends to three years prior to bankruptcy.