Earnings reporting lead-time, evidence from Finland

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School of Economics | Master's thesis
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HELSINKI SCHOOL OF ECONOMICS ABSTRACT Master’s Thesis in Accounting November 23, 2009 Saara Siuko EARNINGS REPORTING LEAD-TIME Evidence from Finland Objectives: The objectives of this study are to present evidence on the timeliness of annual earnings announcements in Finland and to analyze its possible determinants. On one hand, the aim is at exploiting the findings of prior literature by reassessing the arguments and research designs of previous international studies in the Finnish reporting environment. On the other hand, the aim is at broadening the perspective of prior research by extending the array of the possible explanators of the variation in companies’ reporting timeliness. Data: The research sample comprises of all companies listed on the Helsinki Stock Exchange during the selected research period. The empirical tests were conducted on these companies’ annual earnings announcement information. In all, the sample yielded 551 observations. The research period was selected from 1992 to 2008. The data for the empirical tests comes from the databases of Thomson One Banker, primarily from the Worldscope and I/B/E/S Methods: In this study, a multivariate regression analysis is used in order to find statistically significant dependencies between the dependent variable, earnings reporting lead-time, and the chosen explanatory variables. Results: The evidence presented in this paper reveals a steady decline in the reporting lead-times of Finnish publicly traded companies over most of the 17-year period, 1992-2008. The shortening of the reporting lead-time seems to be, however, leveling off to a fairly constant level of reporting timeliness. The most intriguing finding of this study is the effect of information asymmetry on reporting lead-time. Two different measures of information asymmetry are used both of which prove statistically significant estimators of variation in the lead-time of earnings reporting. Keywords: Earnings reporting lead-time, earnings announcement, information asymmetry
Earnings reporting lead-time, earnings announcement, information asymmetry
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