Accounting quality and investors’ information integration of corporate disclosures | Episode No.99

Workshop’s Topic: Investors face integration costs that prevent them from effectively processing accounting information for investment decisions. This paper provides empirical evidence on whether accounting quality affects investors’ efforts and thus the cost of integrating financial information. This study utilizes the unique research setting of Chinese online interactive investor platforms, where investors ask questions to which listed companies respond. This allows us to analyze the integration efforts reflected in the results of text analysis of investors questions posted on the platforms when they try to understand companies’ financial information. We find that investors ask more questions about financial reporting after financial reports with lower accounting quality have been published. We also find that previous accounting questions asked by investors also trigger more questions from other investors, indicating a peer effect. The results of this research underscore the importance of financial reporting quality for investor information integration and thus provide further evidence to encourage regulators and auditors to improve the quality of companies financial reports.

Time and Location: 10:00-11:30 AM (GMT+8), Room A423 (School of Management)

Language: English

Introduction of Speakers

Dr. Hayley Ma

University of Technology Sydney Business School, Accounting Discipline Group

Hayley Ma is a Senior Lecturer in the Accounting Discipline Group at the University of Technology Sydney Business School. Hayley holds a PhD in Accounting from University of Sydney studying the management and economic impact of intangible assets. Hayley was a visiting scholar at Harvard Business School and MIT Sloan School of Management, USA in 2020 and a visiting scholar at Smeal College of Business, Pennsylvania State University, USA in 2014. Her research focuses on firms innovation investment decisions, their impact on firm performance and value, and how firms report and disclose their innovation activities. In addition, she has extensive research experience in the capital markets information environment, financial reporting and disclosure, which contributes to a better understanding of investors’ investment decisions and corporate valuations.