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Review of Accounting Studies

Erschienen in:

24.11.2020

Textual classification of SEC comment letters

verfasst von: James P. Ryans

Erschienen in: Review of Accounting Studies | Ausgabe 1/2021

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Abstract

This study examines the impact of SEC comment letters on future financial reporting outcomes and earnings credibility. Naïve Bayesian classification identifies comment letters associated with future restatements and write-downs. An investor attention-based quantitative measure of importance, using EDGAR downloads, also predicts these outcomes. Disclosure-event abnormal returns, revenue recognition comments, and the number of letters in a conversation appear to be useful quantitative metrics for classifying importance in certain settings. This study also documents trends in comment letter topics over time and identifies topics associated with the textual and quantitative classifications of importance, providing insights into the factors that draw investor attention and that relate to future restatements and write-downs. Innocuous comment letters are associated with improvements in earnings credibility following comment letter reviews.

Vorheriger Artikel Analysts’ annual earnings forecasts and changes to the I/B/E/S database

Nächster Artikel Earnings beta

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Titel: Textual classification of SEC comment letters
verfasst von: James P. Ryans
Publikationsdatum: 24.11.2020
Verlag: Springer US
Erschienen in: Review of Accounting Studies / Ausgabe 1/2021
Print ISSN: 1380-6653
Elektronische ISSN: 1573-7136
DOI: https://doi.org/10.1007/s11142-020-09565-6

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