A comparison of reporting lags of multinational and domestic firms

Ho Young Lee, Vivek Mande, Myungsoo Son

Research output: Contribution to journalArticle

23 Citations (Scopus)

Abstract

This study examines whether multinational firms report earnings sooner than domestic firms. When compared with domestic firms, the reporting environment and business operations of multinational firms are significantly more complex. There is a greater amount of information asymmetry between managers and shareholders of multinational firms. Therefore, multinational firms potentially face higher monitoring and external financing costs. To reduce these costs, we conjecture that managers of multinational firms take steps to reduce the information asymmetry between shareholders and management by increasing the timeliness (a proxy for relevance) of their earnings reports. Specifically, we expect multinational firms to announce earnings earlier than domestic firms. We separate earnings reporting delay into auditor-related delay and management's discretionary delay. While test results weakly support the hypothesis that auditors take longer to audit multinational firms, there is strong evidence that managers of multinational firms release their earnings reports sooner than domestic firms.

Original languageEnglish
Pages (from-to)28-56
Number of pages29
JournalJournal of International Financial Management and Accounting
Volume19
Issue number1
DOIs
Publication statusPublished - 2008 Mar 1

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Multinational firms
Domestic firms
Lag
Managers
Shareholders
Auditors
Costs
Audit
Asymmetry of information
Monitoring
Information asymmetry
External financing
Timeliness

All Science Journal Classification (ASJC) codes

  • Accounting
  • Business, Management and Accounting (miscellaneous)
  • Finance

Cite this

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A comparison of reporting lags of multinational and domestic firms. / Lee, Ho Young; Mande, Vivek; Son, Myungsoo.

In: Journal of International Financial Management and Accounting, Vol. 19, No. 1, 01.03.2008, p. 28-56.

Research output: Contribution to journalArticle

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