The Opportunistic Reporting of Material Events and the Apparent Misconception of Investors' Reaction
Using a comprehensive sample of non-earnings 8-K filings from 1996 to 2011, we examine whether firms engage in opportunistic reporting of mandatory and voluntary news. We find strong evidence of opportunistic reporting of negative news, especially among public firms. Public firms are more likely to...
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2013
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sg-smu-ink.soa_research-20532013-05-14T10:04:00Z The Opportunistic Reporting of Material Events and the Apparent Misconception of Investors' Reaction SEGAL, Dan Segal, Benjamin Using a comprehensive sample of non-earnings 8-K filings from 1996 to 2011, we examine whether firms engage in opportunistic reporting of mandatory and voluntary news. We find strong evidence of opportunistic reporting of negative news, especially among public firms. Public firms are more likely to delay disclosure of negative news, report negative news after trading hours, and report on the last day of the week. We also find evidence of opportunistic bundling of news. Our findings support the notion that managers engage in strategic disclosure by delaying or obfuscating negative news in order to mitigate the potential market reaction. Factors such as the risk of litigation, information asymmetry, and corporate governance influence reporting behavior. Further analysis of the market reaction to opportunistic disclosure uncovers no evidence of investor inattention or under-reaction. 2013-01-01T08:00:00Z text application/pdf https://ink.library.smu.edu.sg/soa_research/1054 https://ink.library.smu.edu.sg/context/soa_research/article/2053/viewcontent/Strategic_Dec_2012.pdf Research Collection School Of Accountancy eng Institutional Knowledge at Singapore Management University SEC Regulation Form 8-K Voluntary disclosure Mandatory disclosure Accounting Corporate Finance |
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SEC Regulation Form 8-K Voluntary disclosure Mandatory disclosure Accounting Corporate Finance SEGAL, Dan Segal, Benjamin The Opportunistic Reporting of Material Events and the Apparent Misconception of Investors' Reaction |
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Using a comprehensive sample of non-earnings 8-K filings from 1996 to 2011, we examine whether firms engage in opportunistic reporting of mandatory and voluntary news. We find strong evidence of opportunistic reporting of negative news, especially among public firms. Public firms are more likely to delay disclosure of negative news, report negative news after trading hours, and report on the last day of the week. We also find evidence of opportunistic bundling of news. Our findings support the notion that managers engage in strategic disclosure by delaying or obfuscating negative news in order to mitigate the potential market reaction. Factors such as the risk of litigation, information asymmetry, and corporate governance influence reporting behavior. Further analysis of the market reaction to opportunistic disclosure uncovers no evidence of investor inattention or under-reaction. |
format |
text |
author |
SEGAL, Dan Segal, Benjamin |
author_facet |
SEGAL, Dan Segal, Benjamin |
author_sort |
SEGAL, Dan |
title |
The Opportunistic Reporting of Material Events and the Apparent Misconception of Investors' Reaction |
title_short |
The Opportunistic Reporting of Material Events and the Apparent Misconception of Investors' Reaction |
title_full |
The Opportunistic Reporting of Material Events and the Apparent Misconception of Investors' Reaction |
title_fullStr |
The Opportunistic Reporting of Material Events and the Apparent Misconception of Investors' Reaction |
title_full_unstemmed |
The Opportunistic Reporting of Material Events and the Apparent Misconception of Investors' Reaction |
title_sort |
opportunistic reporting of material events and the apparent misconception of investors' reaction |
publisher |
Institutional Knowledge at Singapore Management University |
publishDate |
2013 |
url |
https://ink.library.smu.edu.sg/soa_research/1054 https://ink.library.smu.edu.sg/context/soa_research/article/2053/viewcontent/Strategic_Dec_2012.pdf |
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