Melbourne Accounting Research Seminar - Mary Barth

Melbourne Accounting Research Seminar

Fishbowl level 8, The Spot
198 Berkeley St, Carlton

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Mario Schabus

mario.schabus@unimelb.edu.au

T: 03 8344 0218

Professor Mary Barth from Stanford University will present a MARS seminar.

Topic: Does Voluntary Disclosure Substitute for Mandatory Disclosure? Evidence from Contract Redactions

Abstract: This study addresses whether firms provide more voluntary disclosures when they redact otherwise mandatorily disclosed contract information, whether firms have higher information uncertainty after they redact, and, if so, the extent to which this higher uncertainty is mitigated by the disclosures. Redactions are significantly positively associated with more earnings, nonearnings, and total voluntary disclosures made within 90 days after the redaction, but not before. The significant association largely is attributable to research and development and license contracts, which suggests unredacted contracts of this type have more proprietary information. Redactions are significantly positively associated with information uncertainty for up to 180 days after the redactions. Although the disclosures mitigate the higher uncertainty, they do not offset it fully, except for research and development and license contracts. This evidence can be informative to the SEC in its consideration of the effects of reducing mandatory disclosure on information available to investors.