Topic: CSR commitment, financial reporting frequency, and information loss: Evidence from eliminating mandatory quarterly financial reporting in the UK
Speaker: LI Yue, Professor at the University of Toronto
Host: GUO Wei, Professor at the Department of Accounting and Taxation
Time and Date: 15:00-17:00, 26 Mar. 2024
Location: SOM 119
Abstract:
This study examines whether corporate CSR commitment affects firms’ choice of financial reporting frequency. Specifically, we examine whether firms with strong CSR commitments choose to abandon quarterly financial reporting voluntarily, following the reporting regime change in Europe in 2013. We argue that CSR commitment symbolizes a firm’s orientation towards long-term investments and management disapproval of short-termism. Firms with strong CSR commitments would reduce financial reporting frequency to avoid undesired pressure from short-term oriented investors. Using a sample of UK listed companies, we find that firms with strong CSR commitments are more likely to abandon quarterly reporting voluntarily following the change in the U.K.’s Disclosure and Transparency Rules in 2014. Further analysis reveals that firms with strong CSR commitments do not exhibit increased information asymmetry after abandoning quarterly reporting. Such firms are more likely to increase capital spending and long-term investment after abandoning quarterly reporting. Our results are robust to different specifications and controls for firm characteristics known to affect firms’ financial reporting decisions. Overall, our evidence is consistent with the argument that CSR commitment symbolizes a firm’s long-term investment focus, and such firms favor less frequent financial reporting.
Speaker’s Profile:
Professor Li Yue currently serves as a professor of accounting at the University of Toronto in Canada and is also the director of the Master of Management and Accounting Program (MMPA) at the University of Toronto Mississauga Campus. Professor Li Yue was awarded the Distinguished Contributions to Accounting Literature Award by the American Accounting Association (AAA) in 2023. Professor Li Yue's research focuses on the impact of corporate accounting and environmental protection information disclosure on company market valuation. His research expertise includes environmental accounting, corporate environmental information disclosure, corporate social responsibility reporting and auditing, as well as sustainability management. He has published papers in top accounting research journals such as The Accounting Review and Contemporary Accounting Research, and has received more than 8,600 citations on Google Scholar. Professor Li Yue has also served as an invited editor, guest editor, and associate editor for major accounting journals such as Contemporary Accounting Research, British Accounting Review, Journal of Management Accounting Research, and Asia Pacific Journal of Accounting and Economics.
