Determinants of voluntary reporting frequency and its impact on investors and decision-makers
(REMOVAL OF THE QUARTERLY REPORTING REQUIREMENT )
What problem(s) does your research focus on? Why is the problem important, and to whom?
While some firms continued to report interim management statements (IMS) others stopped. However, some firms still issuing voluntarily interim reporting because it reduces information asymmetry between insiders and outsiders therefore, there are some benefits will be used by decision makers, stakeholders, academic circles, and the general public.
Past researches focused on the effect of board monitoring on voluntary disclosure and a recent research used the content of quarterly reports, earnings guidance, corporate investments, analyst following and properties of analysts’ earnings forecasts. Nevertheless, there is a lack of empirical literature on the decision to report a quarter voluntarily in the UK. However, there are many literatures in the US on interims. Hence, the purpose of this research is to conduct further research on determinants of voluntary reporting frequency in the context of the UK and its impact on investors and decision-makers. Since most researches have focused on interim voluntary disclosures and disclosures through annual reports, not many researches are carried out on interim voluntary disclosure and quarterly financial reporting.
The four main research questions of the present study are as follows:
1. What are the determinants of voluntary reporting on a quarterly basis in the UK?
2. Why is it that some companies operating in the UK have opted to cease publishing interim management statement, but others continue to do so on a voluntary basis?
3. What benefits were expected to be realised from ceasing mandatory interim reporting in the UK and, with the benefit of hindsight, what were the unintended consequences of this decision?
4. To what extent have the expected benefits been realised and has it been possible to avoid the associated unintended consequences?
FTSE 350 index will be used as a sample size exclude finical firms and insurance companies and banks From 2012 to 2016 before and after stopping quarterly reporting
The dependent variable is voluntarily quarter reporting (interim reporting frequency)
What are your research hypotheses?
Hypothesis development: the relationship between firm Characteristics and interim reporting frequency (firm-specific factors that are associated with reporting frequency. Leftwich et al. (1981) explore the association between firm characteristics and frequency of reporting. )
– Firm size
– Profitability
– Leverage
– Industry
– Firm Performance
Recent articles that related to the topic
Pozen, R.C., Nallareddy, S. and Rajgopal, S., 2017. Impact of reporting frequency on UK public companies. CFA Institute Research Foundation.
Nallareddy, S., Pozen, R. and Rajgopal, S., 2017. Consequences of mandatory quarterly reporting: The UK experience. Columbia Business School Research Paper, (17-33).
Kraft, A.G., Vashishtha, R. and Venkatachalam, M., 2018. Frequent financial reporting and managerial myopia. The Accounting Review, 93(2), pp.249-275.
Fu, R., Kraft, A., Tian, X., Zhang, H. and Zuo, L., 2020. Financial reporting frequency and corporate innovation. The Journal of Law and Economics, 63(3), pp.501-530.
Ernstberger, J., Link, B., Stich, M. and Vogler, O., 2017. The real effects of mandatory quarterly reporting. The Accounting Review, 92(5), pp.33-60.
Roychowdhury, S., Shroff, N. and Verdi, R.S., 2019. The effects of financial reporting and disclosure on corporate investment: A review. Journal of Accounting and Economics, 68(2-3), p.101246.
Huber, W.D., 2020. The Effects of Financial Reporting and Disclosure on Corporate Investment: Analysis and Critique. The Effects of Financial Reporting and Disclosure on Corporate Investment: Analysis and Critique (October 11, 2020).