Accounting and Finance Department Research Seminar
When: Friday,
April 8, 2022
10:00 AM
-
11:15 AM
Where: > See description for location
Description: The Accounting and Finance Department announces the following research seminar.
Speaker: Associate Professor. Emily Xu (University of New Hampshire)
Title: Disclosure committees: Implications for disclosure quality and timeliness
Date: Friday, April 8, 2022
Time: 10:00-11:15 AM
Location: via Zoom Meeting
Abstract: To help companies comply with the certification requirements under Section 302 of SOX, the SEC recommends issuers form a disclosure committee, "for considering the materiality of information and determining disclosure obligations on a timely basis" (SEC 2002a). While the importance of disclosure committees has been acknowledged by practice, little academic research has examined disclosure committees. In this study, we examine the effects of disclosure committees on disclosure quality and timeliness. We find that the presence of disclosure committees is associated with higher quality and more timely corporate disclosure. These results are distinct from the effects of other documented corporate governance mechanisms and robust to the use of controls for potential correlated omitted variables and endogeneity. In addition, we provide evidence that the benefits of disclosure committees on disclosure quality are greater if membership detail is publicly revealed and that benefits of the committee may be greatest for firms that experience a negative disclosure event. Lastly, we provide evidence that disclosure committees are associated with higher quality earnings announcements and lower likelihood of receiving a severe SEC comment letter. Collectively these results suggest disclosure committees are not merely "window dressing", a conclusion with implications for practitioners, regulators, and academics interested in improving corporate disclosure practices.
For additional information, please contact Prof. Hongkang Xu at hxu5@umassd.edu.
Speaker: Associate Professor. Emily Xu (University of New Hampshire)
Title: Disclosure committees: Implications for disclosure quality and timeliness
Date: Friday, April 8, 2022
Time: 10:00-11:15 AM
Location: via Zoom Meeting
Abstract: To help companies comply with the certification requirements under Section 302 of SOX, the SEC recommends issuers form a disclosure committee, "for considering the materiality of information and determining disclosure obligations on a timely basis" (SEC 2002a). While the importance of disclosure committees has been acknowledged by practice, little academic research has examined disclosure committees. In this study, we examine the effects of disclosure committees on disclosure quality and timeliness. We find that the presence of disclosure committees is associated with higher quality and more timely corporate disclosure. These results are distinct from the effects of other documented corporate governance mechanisms and robust to the use of controls for potential correlated omitted variables and endogeneity. In addition, we provide evidence that the benefits of disclosure committees on disclosure quality are greater if membership detail is publicly revealed and that benefits of the committee may be greatest for firms that experience a negative disclosure event. Lastly, we provide evidence that disclosure committees are associated with higher quality earnings announcements and lower likelihood of receiving a severe SEC comment letter. Collectively these results suggest disclosure committees are not merely "window dressing", a conclusion with implications for practitioners, regulators, and academics interested in improving corporate disclosure practices.
For additional information, please contact Prof. Hongkang Xu at hxu5@umassd.edu.
Contact: > See Description for contact information
Topical Areas: Faculty, Accounting and Finance