Evidence That Management Discussion and Analysis (MD&A) is a Part of a Firm's Overall Disclosure Package *

Evidence That Management Discussion and Analysis (MD&A) is a Part of a Firm's Overall Disclosure... The objective of this study is to investigate the role, if any, that management discussion and analysis (MD&A) plays in a firm's disclosure package. First, we present evidence regarding the usefulness of MD&A. Our evidence is uniformly supportive of the view that MD&A is a source of new and useful information and indicates that MD&A is used for financial analysis purposes by at least one significant user group, sell‐side analysts, who are members of the Toronto Society of Financial Analysts. We then provide evidence on disclosure quality. The results reveal that, overall, MD&A disclosure quality varies with disclosure stimuli similar to those found to influence disclosure choice in other disclosure channels. However, a more refined analysis of the MD&A subcomponents reveals that different factors influence disclosure quality for those subcomponents. Taken together, our results are consistent with the notion that MD&A is a part of a firm's overall disclosure package. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Contemporary Accounting Research Wiley

Evidence That Management Discussion and Analysis (MD&A) is a Part of a Firm's Overall Disclosure Package *

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Publisher
Wiley
Copyright
1999 Canadian Academic Accounting Association
ISSN
0823-9150
eISSN
1911-3846
DOI
10.1111/j.1911-3846.1999.tb00576.x
Publisher site
See Article on Publisher Site

Abstract

The objective of this study is to investigate the role, if any, that management discussion and analysis (MD&A) plays in a firm's disclosure package. First, we present evidence regarding the usefulness of MD&A. Our evidence is uniformly supportive of the view that MD&A is a source of new and useful information and indicates that MD&A is used for financial analysis purposes by at least one significant user group, sell‐side analysts, who are members of the Toronto Society of Financial Analysts. We then provide evidence on disclosure quality. The results reveal that, overall, MD&A disclosure quality varies with disclosure stimuli similar to those found to influence disclosure choice in other disclosure channels. However, a more refined analysis of the MD&A subcomponents reveals that different factors influence disclosure quality for those subcomponents. Taken together, our results are consistent with the notion that MD&A is a part of a firm's overall disclosure package.

Journal

Contemporary Accounting ResearchWiley

Published: Mar 1, 1999

References

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