Financial reporting frequency, information asymmetry, and the cost of equity
Date of Issue2012
Using hand-collected data on firms’ interim reporting frequency from 1951 to 1973, we examine the impact of financial reporting frequency on information asymmetry and the cost of equity. Our results show that higher reporting frequency reduces information asymmetry and the cost of equity, and they are robust towards considerations of the endogenous nature of firms’ reporting frequency choice. We obtain similar results when we focus on mandatory changes in reporting frequency. Our results suggest the benefits of increased reporting frequency.
Journal of accounting and economics
© 2012 Elsevier B.V. This is the author created version of a work that has been peer reviewed and accepted for publication by Journal of Accounting and Economics, Elsevier B.V.. It incorporates referee’s comments but changes resulting from the publishing process, such as copyediting, structural formatting, may not be reflected in this document. The published version is available at: [http://dx.doi.org/10.1016/j.jacceco.2012.07.003].