2021 Volume 9 Issue 2 Pages 37-53
The present study examines the relation between the accelerated timing of annual earnings announcements and the corporate stance toward financial reporting. Identifying firm-specific characteristics that improve the timeliness of these announcements is a significant research question. This study focuses on the corporate stance concerning financial reporting, which researchers cannot directly observe, as one such characteristic.
This study quantitatively analyzes the corporate stance by examining the content of their disclosure regarding their basic policy on the development of internal control systems in compliance with the Japanese Companies Act. Furthermore, this study examines whether the corporate stance contributes to advancing the timing of annual earnings announcements after the fiscal year end, focusing only on each companies that were unable to make the announcements within 45 days (if the 45th day is a holiday, then within the succeeding business day) of the previous year's end, considered an appropriate period, and within 30 days (if the closing day is end of the month, then within the following month) of the previous year's end, considered a more desirable period.
The study provides robust evidence that companies attaching greater importance to financial reporting, in terms of the development of internal control systems, can release the announcements within the appropriate period in the current business year, even if they were unable to do so within such a period in the previous business year. The study also indicates similar but comparatively weak support for companies that were unable to release these announcements within the more desirable period in the previous business year.
