Regulatory oversight and financial reporting incentives: Evidence from SEC budget allocations |
Posted on:2015-06-29 | Degree:Ph.D | Type:Dissertation |
University:University of Pennsylvania | Candidate:Blackburne, Terrence Patrick | Full Text:PDF |
GTID:1479390017492587 | Subject:Business Administration |
Abstract/Summary: | |
This study examines the determinants and consequences of regulatory oversight of corporate disclosures. I investigate the extent to which industry-level political activity influences the intensity of regulatory oversight, and whether variation in the intensity of oversight affects managers' reporting incentives. I exploit variation in the allocation of budgetary resources between the SEC's disclosure review offices as a source of variation in the oversight of financial reporting and disclosures. I find evidence of a significant relationship between industry-level political activity and visibility and the allocation of resources to each office. I then use the amount of budgetary resources allocated to each office as a proxy for the intensity of the SEC oversight that firms in a given industry face. I provide evidence that when SEC oversight is more intense managers report lower discretionary accruals, managers are less likely to issue financial reports that will be subsequently restated, and firms' bid-ask spreads decrease. Overall, the results suggest that SEC oversight plays an important role in shaping managers' reporting and disclosure incentives. |
Keywords/Search Tags: | Oversight, Reporting, Incentives, Evidence, Industry-level political activity, Managers |
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