Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5086535 | Journal of Accounting and Economics | 2016 | 19 Pages |
Abstract
This study examines the impact of financial statement comparability on ex ante crash risk. Using the comparability measures of De Franco et al. (2011), we find that expected crash risk decreases with financial statement comparability, and this negative relation is more pronounced in an environment where managers are more prone to withhold bad news. We also provide evidence that comparability can mitigate the asymmetric market reaction to bad versus good news disclosures. Our results suggest that financial statement comparability disinclines managers from bad news hoarding, which reduces investors׳ perceptions of a firm׳s future crash risk.
Related Topics
Social Sciences and Humanities
Business, Management and Accounting
Accounting
Authors
Jeong-Bon Kim, Leye Li, Louise Yi Lu, Yangxin Yu,