Management Disclosure and Timeliness of Earnings Announcement: An Empirical Study
44 Pages Posted: 15 Aug 2009
Date Written: August 13, 2009
Abstract
We investigate the influence of management disclosure to the timeliness of earnings announcement based on the Scheduled Disclosure Policy in China as well as the requirements on Earnings Predict and Express. Our finding suggests that the traditional timing patterns still remain in China market, but differs from most other countries that the timing patterns follow the random walk process, the timing pattern in China is based on the scheduled disclosure date. In addition, managerial disclosure can significantly affect the timing patterns. Our evidence shows that the releasing of Earnings Predict can significantly enlarge the reporting lags of the annual report; but find little evidence on the influence from Earnings Express. In addition, we find evidence that the timing patterns of annual and first quarter report next years are related due to their closing on time. Further study shows that this relationship can sometimes challenge the traditional timing patterns. To optimize the disclosure profit, managers can sometimes sacrifice their signals as good news that should be announced earlier rationally. Management disclosure, as key determinants of the timeliness of annual reports, shows significant influence on this relationship as well.
Keywords: Scheduled Disclosure Policy, managerial disclosure, timeliness, Earnings Predict and Express, timing patterns
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