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- Publisher
- Wiley
- Copyright
- © 2011 The Canadian Academic Accounting Association
- ISSN
- 0823-9150
- eISSN
- 1911-3846
- DOI
- 10.1111/j.1911-3846.2011.01130.x
- Publisher site
- See Article on Publisher Site
Abstract
1. Introduction Earnings press releases are “the major news event of the season for many companies as well as investors, analysts, financial media, and the market” ( Mahoney and Lewis 2004 ). The information content of earnings press releases has increased significantly over time ( Kross and Kim 2000 ; Lo and Lys 2001 ; Francis, Schipper, and Vincent 2002a, 2002b ; Landsman and Maydew 2002 ; Collins, Li, and Xie 2005 ) and has been accompanied by a corresponding increase in press release length. Specifically, the number of words used in earnings press releases increased approximately five times between 1980 and 1999 ( Francis et al. 2002b ). This trend continued over our sample period, with median earnings press release length increasing to more than 1,700 words by 2003, a greater than 90 percent increase from 1998. This dramatic increase in the sheer number of words used in earnings press releases suggests an important question: Does the language used throughout an earnings press release provide a signal regarding managers’ expectations about future performance? If so, does the market respond to this information? Earnings press releases are characterized as a disclosure mechanism revealing a “package of information” to
Journal
Contemporary Accounting Research – Wiley
Published: Sep 1, 2012