The Effect on Financial Reporting Quality of an Exemption From the SEC Reporting Requirements for Foreign Private Issuers

Authors

Stacy Mastrolia, Bucknell UniversityFollow
Giorgio Gotti, University of Texas at El PasoFollow

Publication Date

3-2012

Description

We test for differences in financial reporting quality between companies that are required to file periodically with the SEC and those that are exempted from filing reports with the SEC under Rule 12g3-2(b). We examine three earnings quality measures: conservatism, abnormal accruals, and the predictability of earnings. Our results, for all three measures, show different financial reporting quality for companies that file with the SEC than for companies exempt from filing requirements. This paper provides empirical evidence of a link between filing with the SEC and financial reporting quality for foreign firms.

Journal

International Journal of Accounting

Volume

47

Issue

1

First Page

44

Last Page

71

Department

Accounting and Financial Management

Link to Published Version