Voluntary Disclosure of Disaggregated Balance Sheet and Cash Flow Information around Restatements

What is it about?

We examine how restatement announcements are associated with changes in voluntary disclosure of balance sheet and cash flow (BS/CF) information and test how such changes affect post-restatement earnings informativeness. Our study makes three primary contributions: (1) we provide evidence that firms reduce BS/CF information following restatements, (2) such reductions help to explain the post-restatement drop in earnings informativeness, and (3) firms balance heightened litigation concerns with those of improving reputation following restatements.

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