Financial statement comparability and expected crash risk

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review

110 Scopus Citations
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Author(s)

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Detail(s)

Original languageEnglish
Pages (from-to)294-312
Journal / PublicationJournal of Accounting and Economics
Volume61
Issue number2-3
Online published11 Jan 2016
Publication statusPublished - Apr 2016

Abstract

This study examines the impact of financial statement comparability on ex ante crash risk. Using the comparability measures of De Franco et al. (2011), we find that expected crash risk decreases with financial statement comparability, and this negative relation is more pronounced in an environment where managers are more prone to withhold bad news. We also provide evidence that comparability can mitigate the asymmetric market reaction to bad versus good news disclosures. Our results suggest that financial statement comparability disinclines managers from bad news hoarding, which reduces investors' perceptions of a firm's future crash risk.

Research Area(s)

  • Bad news hoarding, Expected crash risk, Financial statement comparability

Bibliographic Note

Full text of this publication does not contain sufficient affiliation information. With consent from the author(s) concerned, the Research Unit(s) information for this record is based on the existing academic department affiliation of the author(s).