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Real-time revenue and firm disclosure.

Authors :
Blankespoor, Elizabeth
Hendricks, Bradley E.
Piotroski, Joseph
Synn, Christina
Source :
Review of Accounting Studies; Sep2022, Vol. 27 Issue 3, p1079-1116, 38p, 9 Charts, 4 Graphs
Publication Year :
2022

Abstract

We examine firm disclosure choice when information is received on a real-time, continuous basis. We use transaction-level credit and debit card sales for a sample of retail firms to construct a weekly measure of abnormal revenue for each firm. We validate the informativeness of this abnormal real-time revenue information, confirming its positive correlation with abnormal returns, unexpected revenue realizations, and management revenue forecast news. Using revenue forecasts, we find that firms are less likely to disclose abnormally negative news early in the quarter. As the quarter progresses, firms reduce their withholding of negative news. These results are consistent with impending earnings announcements disciplining managers to provide negative news. This pattern of initial withholding and then disclosure exists primarily in firms with high analyst coverage, high institutional ownership, or high litigation risk. Finally, we find increased insider stock sales in weeks with abnormally negative news and no firm disclosure. Overall, our study provides evidence of the informativeness of real-time information and manager discretion in its release. [ABSTRACT FROM AUTHOR]

Details

Language :
English
ISSN :
13806653
Volume :
27
Issue :
3
Database :
Complementary Index
Journal :
Review of Accounting Studies
Publication Type :
Academic Journal
Accession number :
159103146
Full Text :
https://doi.org/10.1007/s11142-022-09703-2