The effect of reporting frequency on the timeliness of earnings.pdf

ARTICLE IN PRESSJournal of Accounting and Economics 43 (2007) 181–2170165-4101/$ - doi:10.1016/j $We appr Doogar, Bjor Jerry Salomo Stephen Zeff Research Ta Hebrew Univ Rochester, R Alisa Marcus York Stock Business Sch Bradley Polic Correspo E-mail /locate/jaeThe effect of reporting frequency on the timeliness of earnings: The cases of voluntary and mandatory interim reports$ Marty Butlera,, Arthur Kraftb, Ira S. Weissc,d aGoizueta Business School, Emory University, Atlanta, GA 30322, USA bLondon Business School, Regent’s Park, London NW1 4SA, UK cColumbia Business School, Columbia University, New York, NY 10027, USA dGraduate School of Business, University of Chicago, Chicago, IL 60637, USA Received 13 March 2002; received in revised form 7 August 2006; accepted 20 October 2006 Available online 14 February 2007Abstract 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 increasedsee front matter r 2007 Elsevier B.V. All rights reserved. .jacceco.2007.02.001 eciate the comments of Bill Baber, Ray Ball, Sudipta Basu, Walt Blacconiere, Larry Brown, Rajib n Jorgensen, Krishna Kumar, Andy Leone, Thomas Lys (the editor), Jim McKeown, Sanjog Misra, n, Rachel Schwartz, Jake Thomas, Ross Watts, Jim Wahlen, Joanna Wu, Gregory Waymire, , Jerry Zimmerman, an anonymous referee, and workshop participants at the Berkeley Accounting lks, Columbia’s Burton Workshop, Connecticut, Emory, George Washington, Georgia State, ersity, Illinois, Indiana, London Business School, Maryland, Northwestern, Ohio State, Penn State, utgers, SMU, Tel Aviv, Texas AM, and Vanderbilt.