Clarity begins at home internal information asymmetry and external communication quality Chen Chen [y otros cuatro]
Tipo de material: ArtículoDescripción: Páginas 71 a la 101Tema(s): En: The accounting review 2018 V.93 No.1 (Ene)Incluye tablas, referencias bibliográficas y apéndicesResumen: This paper investigates the effect of internal information asymmetry (IIA) within conglomerate firms on the quality of management forecasts and financial statements. We develop a novel measure to capture IIA between divisional managers and top corporate managers, computed as the difference in their respective trading profits on their own company's stock (DIFRET). Numerous validation tests indicate that DIFRET indeed captures the information asymmetry between divisional managers and top managers. In our primary tests, we find that DIFRET is associated negatively with the accuracy, bias, specificity, and frequency of management forecasts. Furthermore, the likelihood of error-driven accounting restatements increases with DIFRET. Our results, thus, suggest that external communication quality suffers when the information asymmetry between divisional managers and top managers is more severeTipo de ítem | Biblioteca actual | Colección | Signatura topográfica | Info Vol | Copia número | Estado | Fecha de vencimiento | Código de barras | |
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Revistas | Central Bogotá Sala Hemeroteca | Colección Hemeroteca | 657 (Navegar estantería(Abre debajo)) | 2018 V.93 No.1 (Ene) | 1 | Disponible | 0000002033448 |
This paper investigates the effect of internal information asymmetry (IIA) within conglomerate firms on the quality of management forecasts and financial statements. We develop a novel measure to capture IIA between divisional managers and top corporate managers, computed as the difference in their respective trading profits on their own company's stock (DIFRET). Numerous validation tests indicate that DIFRET indeed captures the information asymmetry between divisional managers and top managers. In our primary tests, we find that DIFRET is associated negatively with the accuracy, bias, specificity, and frequency of management forecasts. Furthermore, the likelihood of error-driven accounting restatements increases with DIFRET. Our results, thus, suggest that external communication quality suffers when the information asymmetry between divisional managers and top managers is more severe