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Information Acquisition Cost and Comment Letter Review Process—Evidence From China

Qiaoling Fang et al.

Journal of Accounting Auditing and Finance2026https://doi.org/10.1177/0148558x261415950article
AJG 3ABDC A
Weight
0.50

Abstract

This study investigates the effect of information acquisition costs on regulator’s review process over financial reporting. Using hand-collected comment letter (CL) data from the Shanghai Stock Exchange, we find that firms located farther away from the regulator are more likely to receive CLs and the review outcomes are more substantive. Additional analyses using propensity score-matched sample, first-tier city sample and misreported sample are consistent with our main findings. More importantly, our empirical results show that the effect of information acquisition cost not only manifest in geographical distance, transportation infrastructure development and economic linkage are also important dimensions through which information acquisition cost would affect regulator’s monitoring activities. In contrast to the findings of prior literature, our results suggest that the regulator uses the review process to mitigate the constraint in monitoring firms with high information acquisition costs.

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https://doi.org/https://doi.org/10.1177/0148558x261415950

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@article{qiaoling2026,
  title        = {{Information Acquisition Cost and Comment Letter Review Process—Evidence From China}},
  author       = {Qiaoling Fang et al.},
  journal      = {Journal of Accounting Auditing and Finance},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1177/0148558x261415950},
}

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Information Acquisition Cost and Comment Letter Review Process—Evidence From China

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Evidence weight

0.50

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

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
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.