Event Details

Accounting and Finance, Accounting seminar presented by Professor Kris Allee, University of Arkansas. Paper title: Earnings Season Reporting Order and Differential Disclosure: Evidence from Conference Calls.

Kris D. Allee | Directory | Accounting | Walton College | University of Arkansas (uark.edu)

Abstract

The earnings season represents a key information discovery period for market participants. During an earnings season, components of firm performance can be derived from both the firms’ earnings announcement and the disclosures of peer firms reporting in the earnings season. We examine whether and how managers structure their qualitative disclosure in response to disclosures from earlier announcing peer firms. We find that firms reporting later in the earnings season have less similar manager prepared narrative (MPN) portions of their earnings conference calls relative to their earlier reporting peers. Using topic modeling, we find that later reporting firms with more dissimilar MPNs are associated with more diverse analyst questions. Further, we find that these dissimilar questions are subsequentially associated with several benefits for analysts when forecasting for the following quarter. Taken together, our results suggest an adaptation approach to conference call disclosures as firms selectively structure qualitative disclosures in response to information disclosed by earlier reporting peers which, in turn, impacts analyst effectiveness. Keywords: Conference calls, earnings season, disclosure, topic modeling JEL classification: G10, G14, M41, M49