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Consequences of More Frequent Reporting: The U.K. Experience

Suresh Nallareddy et al.

Journal of Law, Finance, and Accounting2021https://doi.org/10.1561/108.00000051article
AJG 2
Weight
0.57

What the paper says

The Securities and Exchange Commission (SEC) is considering the pros and cons of (i) moving to semi-annual reporting from quarterly reporting, and/or (ii) making quarterly reporting less burdensome by allowing more qualitative disclosures. We exploit the start of less-burdensome and more frequent reporting by the Financial Conduct Authority (FCA) in 2007 and the end of the requirement in 2014 in the United Kingdom to examine corporate and capital market behavior. After the imposition of more frequent reporting in 2007, we find (i) a dramatic decline in the number of companies that issue reports with quantitative information (defined as including both sales and earnings numbers for the quarter), (ii) a substantial increase in companies announcing managerial guidance for the upcoming year’s earnings or sales, and (iii) an increase in analyst following for all sample companies. Companies that voluntarily moved back from more frequent to semi-annual reporting after 2014 have experienced a reduction in analyst coverage. However, we find that the imposition of more frequent reporting and the end of such a requirement have virtually no impact on firms’ investment decisions.

14 citations

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https://doi.org/https://doi.org/10.1561/108.00000051

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@article{suresh2021,
  title        = {{Consequences of More Frequent Reporting: The U.K. Experience}},
  author       = {Suresh Nallareddy et al.},
  journal      = {Journal of Law, Finance, and Accounting},
  year         = {2021},
  doi          = {https://doi.org/https://doi.org/10.1561/108.00000051},
}

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Consequences of More Frequent Reporting: The U.K. Experience

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Evidence weight

0.57

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.55 × 0.4 = 0.22
M · momentum0.80 × 0.15 = 0.12
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.