An International Meeting of the American Accounting Association American Accounting Association 2006 Annual Meeting August 6–9, 2006 Washington, D.C.

Asheq Razaur Rahman
Massey University

Abstract: I conduct a two-stage analysis to examine how the frequency of financial media affects the informativeness of earnings. In the first stage, using 5410 quarterly observations of 240 S&P Super Composite firms from 1994 to 2002 and measuring frequency of financial media coverage on a quarterly basis, I find that such coverage enhances liquidity at earnings announcement dates. However, I do not find a significant influence of frequency of financial media coverage on price informativeness of earnings. In the second stage, using a more robust sample of 1549 firm-quarters from recent years, 2000 to 2003, I find that frequent financial media coverage in the month prior to the earnings announcement reduces the informativeness of earnings, whereas frequent financial media coverage in the month surrounding the earnings announcement enhances the informativeness of earnings

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