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Discussion of [`]shareholder litigation and changes in disclosure behavior'

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  • Lowry, Michelle

Abstract

Rogers and VanBuskirk [2008. Shareholder litigation and changes in disclosure behavior. Journal of Accounting and Economics 40, 3-73] examine changes in sued firms' disclosure policies between the pre-lawsuit and post-lawsuit periods. They find that these firms decrease the magnitude and precision of disclosures following the lawsuits. The authors conclude that managers of sued firms perceive disclosure to contribute to (rather than decrease) the probability of being sued. While the evidence showing that the magnitude and precision of disclosure decreases post-lawsuit appears to be robust, I raise some questions about what we learn from this finding.

Suggested Citation

  • Lowry, Michelle, 2009. "Discussion of [`]shareholder litigation and changes in disclosure behavior'," Journal of Accounting and Economics, Elsevier, vol. 47(1-2), pages 157-159, March.
    • Handle: RePEc:eee:jaecon:v:47:y:2009:i:1-2:p:157-159
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    References listed on IDEAS

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    1. Skinner, Dj, 1994. "Why Firms Voluntarily Disclose Bad-News," Journal of Accounting Research, Wiley Blackwell, vol. 32(1), pages 38-60.
    2. Graham, John R. & Harvey, Campbell R. & Rajgopal, Shiva, 2005. "The economic implications of corporate financial reporting," Journal of Accounting and Economics, Elsevier, vol. 40(1-3), pages 3-73, December.
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    Cited by:

    1. Hanley, Kathleen Weiss & Hoberg, Gerard, 2012. "Litigation risk, strategic disclosure and the underpricing of initial public offerings," Journal of Financial Economics, Elsevier, vol. 103(2), pages 235-254.
    2. Hassanein, Ahmed & Hussainey, Khaled, 2015. "Is forward-looking financial disclosure really informative? Evidence from UK narrative statements," International Review of Financial Analysis, Elsevier, vol. 41(C), pages 52-61.
    3. Lin, Chen & Officer, Micah S. & Schmid, Thomas & Zou, Hong, 2019. "Is skin in the game a game changer? Evidence from mandatory changes of D&O insurance policies," Journal of Accounting and Economics, Elsevier, vol. 68(1).

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