The Information Content of 10-K Narratives: Comparing MD&A and Footnotes Disclosures

Amel-Zadeh, Amir and Faasse, J (2016) The Information Content of 10-K Narratives: Comparing MD&A and Footnotes Disclosures. Working Paper.

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Abstract

This paper examines the characteristics and variations within firms’ 10-K filings over a 20 year time period. We find that investors’ reaction to textual characteristics of the MD&A in 10-Ks is much stronger and more timely than their reaction to textual characteristics of the notes to the financial statements. Characteristics of the MD&A and footnotes are also predictive of future returns, volatility, and firm profitability. Our evidence suggests that investor pay limited attention to the footnotes compared to the MD&A and that firms exploit biases in investors’ information processing through their disclosure choices within 10-K filings.

Item Type: Other Working Paper
Keywords: accounting
Subject(s): Accounting
Date Deposited: 17 Aug 2016 09:23
Last Modified: 07 Sep 2018 13:08
Funders: not applicable
URI: http://eureka.sbs.ox.ac.uk/id/eprint/6212

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