|
Archive@NYU >
Stern School of Business >
Accounting Working Papers >
Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/27571
|
| Title: | Clustered Disclosures by Competing Firms: The Choice of Reporting Periods |
| Authors: | Fried, Dov
Sinha, Nishi |
| Keywords: | Information Acquisition
Disclosure
Competition
Timing
Fiscal year-end |
| Issue Date: | Feb-2008 |
| Series/Report no.: | Haim Dov Fried-02 |
| Abstract: | In some industries firms schedule their disclosure at about the same
time, usually around the end of the business cycle, whereas in others
such disclosures are more dispersed over time. This paper examines a
firm’s choice of a fiscal year-end (and hence of disclosure
timing) relative to the business cycle and to the timing chosen by other
firms in the industry. We model a stochastic setting in which the
periodic closing of books yields information that is relevant for
subsequent managerial decisions. The results show that while it is
business seasonality that is the primary determinant of reporting period
choice, competitive forces in the form of information transfer effects
and proprietary disclosure costs have the ability to make firms' fiscal
years deviate from the business cycle. Such deviations are more likely
when auto-correlation in firms' annual costs is low, when within-season
variations in business conditions are low, when uncertainty is primarily
about industry-wide rather than firm-specific factors, and/or when
affordable opportunities exist for collecting information that the
year-end closing of books typically provides. Further, if incumbent
firms are already reporting at the end of the business season, newer
firms may have a greater inclination to make a different choice. The
results also offer a novel rationale for why the end of the business
cycle is an attractive fiscal year-end. The desire to receive
information at an opportune time, rather than the ease of collecting
information or any other factors, makes the end of business cycle an
attractive year-end in our setting. |
| URI: | http://hdl.handle.net/2451/27571 |
| Appears in Collections: | Accounting Working Papers
|
All items in Faculty Digital Archive are protected by copyright, with all rights reserved.
|
