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Full-Text Articles in Corporate Finance
Readability Of 10-K Reports And Stock Price Crash Risk, Chansog (Francis) Kim, Ke Wang, Liandong Zhang
Readability Of 10-K Reports And Stock Price Crash Risk, Chansog (Francis) Kim, Ke Wang, Liandong Zhang
Research Collection School Of Accountancy
This study shows that less readable 10‐K reports are associated with higher stock price crash risk. The results are consistent with the argument that managers can successfully hide adverse information by writing complex financial reports, which leads to stock price crashes when the hidden bad news accumulates and reaches a tipping point. Cross‐sectional analyses show that the effect of financial reporting complexity on crash risk is more pronounced for firms with persistent negative earnings news or transitory positive earnings news, greater chief executive officer stock option incentives, or lower litigation risk. Finally, accrual manipulation appears to be positively related to …
Recommendations From Sec’S Plain English Handbook: Perspectives From Behavioral Research, Clarence Goh
Recommendations From Sec’S Plain English Handbook: Perspectives From Behavioral Research, Clarence Goh
Research Collection School Of Accountancy
The SEC published the plain English handbook in 1998 with the objective of providing preparers of financial disclosures with a guide to using well-established techniques to create clearer and more informative disclosure documents. The handbook provides various recommendations to preparers of disclosure documents. In this study, I examine and systematically synthesize the extent behavioural research literature that investigates the impact of implementing these recommendations on investors. I do so by developing a framework to systematically examine relevant studies. Overall, the analysis provides important insights from a behavioural perspective into how and why investors react to various recommendations in the SEC’s …