Quality of financial reporting and uncertainty: role of political signals and life cycle
Abstract/Description
The empirical literature on financial reporting quality primarily focuses on finding its determinants within the firm. Using annual firm data in the United States from 1987-2019, this study investigates certain outside factors, particularly the economic policy uncertainty and the political signal quality, in addition to the firms’ life cycle stage. Our findings suggest that a rise in economic uncertainty is associated with increased quality of financial reporting. However, this relationship is weaker in the presence of low political quality signals. We also find that firms in the early stage of their life cycle display lower quality of financial reporting while those in mature stages have better reporting standards.
Track
Accounting, Law, and Finance
Session Number/Theme
Session 2A
Session Chair
Dr. Hilal Anwar Butt, Institute of Business Administration, Karachi
Session Discussant
Tahira Mariam Jaffery; Zaira Anees; Dr. Sharjeel Ahmed Hasnie; Dr. Falik Shear
Start Date/Time
23-6-2022 3:50 PM
End Date/Time
23-6-2022 4:10 PM
Location
Training Room 3, Marriott Hotel, Karachi
Recommended Citation
Khawaja, M. Z. (2022). Quality of financial reporting and uncertainty: role of political signals and life cycle. 3rd IBA SBS International Conference 2024. Retrieved from https://ir.iba.edu.pk/sbsic/2022/program/21
COinS
Quality of financial reporting and uncertainty: role of political signals and life cycle
Training Room 3, Marriott Hotel, Karachi
The empirical literature on financial reporting quality primarily focuses on finding its determinants within the firm. Using annual firm data in the United States from 1987-2019, this study investigates certain outside factors, particularly the economic policy uncertainty and the political signal quality, in addition to the firms’ life cycle stage. Our findings suggest that a rise in economic uncertainty is associated with increased quality of financial reporting. However, this relationship is weaker in the presence of low political quality signals. We also find that firms in the early stage of their life cycle display lower quality of financial reporting while those in mature stages have better reporting standards.
