Universität zu Köln

Ernstberger, Jurgen, Link, Benedikt, Stich, Michael and Vogler, Oliver (2017). The Real Effects of Mandatory Quarterly Reporting. Account. Rev., 92 (5). S. 33 - 61. SARASOTA: AMER ACCOUNTING ASSOC. ISSN 1558-7967

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Abstract

This paper examines how mandatory quarterly reporting affects managers' business decisions in terms of real activities manipulations. For our analyses, we use the setting of the European Union, where the reporting frequency was increased with the introduction of a mandate to issue Interim Management Statements (IMSs) on a quarterly basis. Controlling for accrual-based earnings management, we find an increase in real activities manipulations for firms mandated to switch from semiannual to quarterly IMS reporting, relative to matched control firms. This finding is in line with the notion of higher managerial short-termism resulting from increased reporting frequency requirements. Further, we provide evidence that reporting frequency-induced real activities manipulations are more pronounced if the price pressure from investors is high and if the informativeness of IMS disclosure is low. We also document that reporting frequency-induced real activities manipulations are followed by a short-term increase and then a decrease in firms' operating performance.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Ernstberger, Jurgen UNSPECIFIED UNSPECIFIED UNSPECIFIED Link, Benedikt UNSPECIFIED UNSPECIFIED UNSPECIFIED Stich, Michael UNSPECIFIED UNSPECIFIED UNSPECIFIED Vogler, Oliver UNSPECIFIED UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-220512
DOI:	10.2308/accr-51705
Journal or Publication Title:	Account. Rev.
Volume:	92
Number:	5
Page Range:	S. 33 - 61
Date:	2017
Publisher:	AMER ACCOUNTING ASSOC
Place of Publication:	SARASOTA
ISSN:	1558-7967
Language:	English
Faculty:	Unspecified
Divisions:	Unspecified
Subjects:	no entry
Uncontrolled Keywords:	Keywords Language EARNINGS MANAGEMENT CONSTRAINT; ACTIVITIES MANIPULATION; INFORMATION ASYMMETRY; BALANCE-SHEET; INSTITUTIONAL INVESTORS; FINANCIAL REPORTS; STOCK-MARKET; CASH FLOWS; FREQUENCY; DISCLOSURE Multiple languages Business, Finance Multiple languages
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/22051