Revealing Future Prospects without Forecasts

• Autores: Edward Xuejun Li
• Localización: Accounting review: A quarterly journal of the American Accounting Association, ISSN 0001-4826, Vol. 88, Nº 5, 2013, págs. 1769-1804
• Idioma: inglés
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• Resumen

  • Extant research on voluntary disclosure about future prospects has focused on two forward-looking disclosure mechanisms: management forecasts and conference calls. This study examines the accelerated filing of material contracts as another type of future-related disclosure that involves no forecasting. I find that firms are more likely to accelerate material contract filings when forward-looking disclosures could lack credibility or arouse litigation concerns. However, for proprietary cost considerations, firms delay contract filings when facing high (low) product market competition from incumbents (potential entrants). I also find that accelerated contract filing is incrementally associated with lower information asymmetry. Overall, while presenting a cost-benefit trade-off that is distinctly different from forward-looking disclosures, accelerated contract filing is an important alternative channel through which firms communicate future prospects to investors.