Keywords
voluntary disclosure, financial statementcomplexity
Abstract
Guay e tal. (2016) document that firms with longer and more complex 10-Ks provide relatively more voluntary disclosure, which they interpret as evidence that managers use voluntary disclosure to mitigate negative effects of complex mandatory disclosure. We review the results of Guay et al. and focus on two main challenges to inferring causality: (1) the coincidence of upward over-time trends in annual report length, complexity, and voluntary disclosure, and (2) the potential for omitted correlated variables, such as changes in firm economics, to drive changes in 10-K textual characteristics and voluntary disclosure. While the results in Guay et al. are extensive and robust, we argue that economic drivers of, and trends in, voluntary disclosure present important avenues for future research.
Original Publication Citation
“Do Managers Really Guide Through the Fog? On the Challenges in Assessing the Causes of Voluntary Disclosure” (with Mark Lang and Lorien Stice-Lawrence) Journal of Accounting and Economics 62, no. 2-3 (2016): 270-276.
BYU ScholarsArchive Citation
Dyer, Travis; Lang, Mark; and Stice-Lawrence, Lorien, "Do Managers Really Guide Through the fog? On the Challenges in Assessing the Causes of Voluntary Disclosure" (2016). Faculty Publications. 8428.
https://scholarsarchive.byu.edu/facpub/8428
Document Type
Peer-Reviewed Article
Publication Date
2016
Publisher
Journal of Accounting and Economics
Language
English
College
Marriott School of Business
Department
Accountancy
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