دانلود Financial statement comparability and expected crash risk

Abstract

This study examines the impact of financial statement comparability on ex ante crash risk. Using the comparability measures of De Franco, Kothari, and Verdi (2011), we find that expected  crash  risk  decreases  with  financial  statement  comparability,  and  this  negative relation  is  more  pronounced  in  an  environment  where  managers  are  more  prone  to withhold  bad  news.  We  also  provide  evidence  that  comparability  can  mitigate  the asymmetric market reaction to bad versus good news disclosures. Our results suggest that financial statement  comparability  disinclines  managers  from  bad  news  hoarding,  which reduces investors’ perceptions of a firm’s future crash risk.