The Effect of Reporting Frequency on the Timeliness of Earnings: The Cases of Voluntary and Mandatory Interim Reports

Posted: 19 Jul 2007

See all articles by Marty Butler

Marty Butler

AlixPartners LLP

Arthur G. Kraft

City University London - Cass Business School

Ira S. Weiss

University of Chicago - Graduate School of Business; Columbia Business School - Department of Accounting

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Abstract

We examine whether financial reporting frequency affects the speed with which accounting information is reflected in security prices. For a sample of 28,824 reporting-frequency observations from 1950 to 1973, we find little evidence of differences in timeliness between firms reporting quarterly and those reporting semiannually, even after controlling for self-selection. However, firms that voluntarily increased reporting frequency from semiannual to quarterly experienced increased timeliness, while firms whose increase was mandated by the SEC did not. We conclude that there is little evidence to support the claim that regulation forcing firms to report more frequently improves earnings timeliness.

Keywords: Earnings timeliness, Voluntary disclosure, Regulation, Information asymmetry, Agency costs

JEL Classification: D82, G38, M41, L51

Suggested Citation

Butler, Marty B. and Kraft, Arthur Gerald and Weiss, Ira Samuel, The Effect of Reporting Frequency on the Timeliness of Earnings: The Cases of Voluntary and Mandatory Interim Reports. Journal of Accounting & Economics (JAE), Vol. 44, Nos. 2-3, pp. 181-127, 2007, Available at SSRN: https://ssrn.com/abstract=1001543

Marty B. Butler (Contact Author)

AlixPartners LLP ( email )

2101 Cedar Springs Rd, Ste 1100
Dallas, TX 75201
United States
214-810-6622 (Phone)

Arthur Gerald Kraft

City University London - Cass Business School ( email )

London, EC2Y 8HB
Great Britain

Ira Samuel Weiss

University of Chicago - Graduate School of Business ( email )

5807 S. Woodlawn Ave
Chicago, IL 60637
United States

Columbia Business School - Department of Accounting ( email )

3022 Broadway
622 Uris Hall
New York, NY 10027
United States

HOME PAGE: http://www.gsb.columbia.edu/divisions/accounting/iweiss

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