 |
An International Meeting of American Accounting
Association
|
Timeliness of Firms’ Voluntary Disclosure of Good and Bad News |
Jennifer Tucker
University of Florida
Paul Zarowin
New York University
Abstract: Mixed views exist about whether firm managers voluntarily disclose good news more timely than they do bad news. Our study investigates this issue by inferring managers’ strategic disclosure behavior from the stock returns in four adjacent windows for a fiscal quarter, prior to and including the earnings announcement. We find that large firms disclose the same proportion of news in each examination window in good- and bad-news quarters; however, very bad news is more frequent during the quarter than after the quarter ends. In contrast, small firms disclose a larger proportion of news early in good- than bad-news quarters; however, very bad news is most frequent around earnings announcement. Our results suggest that the timeliness of firms’ voluntary disclosure of good vs. bad news varies with firm size and the degrees of news.