@article{ce2e78f3702440b8b5f155065252d3b2,
title = "The real effects of mandatory quarterly reporting",
abstract = "This paper examines how mandatory quarterly reporting affects managers' business decisions in terms of real activities manipulations. For our analyses, we use the setting of the European Union, where the reporting frequency was increased with the introduction of a mandate to issue Interim Management Statements (IMSs) on a quarterly basis. Controlling for accrual-based earnings management, we find an increase in real activities manipulations for firms mandated to switch from semiannual to quarterly IMS reporting, relative to matched control firms. This finding is in line with the notion of higher managerial short-termism resulting from increased reporting frequency requirements. Further, we provide evidence that reporting frequency-induced real activities manipulations are more pronounced if the price pressure from investors is high and if the informativeness of IMS disclosure is low. We also document that reporting frequency-induced real activities manipulations are followed by a short-term increase and then a decrease in firms' operating performance.",
keywords = "Interim Management Statements, Quarterly disclosure, Quarterly reporting, Real activities manipulations, Real effects",
author = "J{\"u}rgen Ernstberger and Benedikt Link and Michael Stich and Oliver Vogler",
note = "Funding Information: We gratefully acknowledge helpful comments and suggestions by Jeffrey Abarbanell, Ray Ball, Wolfgang Ballwieser, Robert Bushman, Hans B. Christensen, Lucie Courteau, Alex Edmans, Carolin Esterl, Peter Fiechter, Joachim Gassen, Markus Glaser, Igor Goncharov, Luzi Hail, Christian Hofmann, Amy P. Hutton (editor), Martin Jacob, S. P. Kothari, Eva Labro, Mark Lang, Christian Leuz, Scott Liao, Thomas Lys, Edward Maydew, Yaw Mensah, Peter Pope, William Rees, Edward Riedl, Jonathan Rogers, Sugata Roychowdhury, Thorsten Sellhorn, Roger Silvers, Stephen Stubben, Rodrigo Verdi, Alfred Wagenhofer, Ross Watts, Joseph Weber, Ira Weiss, J{\"o}rg-Richard Werner, and Peter Wysocki, three anonymous referees, and the participants of the 2010 Ph.D. Seminar on Market-Based Research in International Accounting at the Universit{\"a}t Z{\"u}rich, the 2011 Annual Congress of the German Academic Association for Business Research, the 2011 European Accounting Association Doctoral Colloquium and Annual Congress, the 2011 International Accounting Section Midyear Conference, and the research workshops at the Frankfurt School of Finance and Management, Ludwig Maximilians Universit{\"a}t M{\"u}nchen, and at the WHU–Otto Beisheim School of Management. We acknowledge the financial support of the German Federal Ministry of Education and Research (BMBF), the Hanns Seidel Foundation, and of the Schoeller Research Center.",
year = "2017",
month = sep,
doi = "10.2308/accr-51705",
language = "English",
volume = "92",
pages = "33--60",
journal = "Accounting Review",
issn = "0001-4826",
publisher = "American Accounting Association",
number = "5",
}