Journal article
The Timeliness of Bad Earnings News and Litigation Risk
The Accounting review, Vol.87(6), pp.1967-1991
11/01/2012
DOI: 10.2308/accr-50221
Abstract
This study investigates whether the timely revelation of bad earnings news is associated with a lower incidence of litigation. The timeliness of earnings news is captured by a new measure based on the evolution of the consensus analyst earnings forecast. Holding total bad earnings news and other determinants of litigation constant, we find that earlier revelation of bad earnings news lowers the likelihood of litigation. This result holds for both settled and dismissed lawsuits. Further, we reconcile our findings with prior work that measures timeliness using managerial warnings via press releases. These tests suggest our findings are attributable to the ability of our timeliness measure to capture bad earning news revealed through disclosure channels beyond press releases.
Details
- Title: Subtitle
- The Timeliness of Bad Earnings News and Litigation Risk
- Creators
- Dain C. Donelson - The University of Texas at AustinJohn M. McInnis - The University of Texas at AustinRichard D. Mergenthaler - University of IowaYong Yu - The University of Texas at Austin
- Resource Type
- Journal article
- Publication Details
- The Accounting review, Vol.87(6), pp.1967-1991
- Publisher
- Amer Accounting Assoc
- DOI
- 10.2308/accr-50221
- ISSN
- 0001-4826
- eISSN
- 1558-7967
- Number of pages
- 25
- Language
- English
- Date published
- 11/01/2012
- Academic Unit
- Accounting; Law Faculty
- Record Identifier
- 9984380380502771
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