The Dilution Effect of Continuous Internet Information Disclosure on the Information Content of Annual Financial Reports

• Main Authors: Yi-Wen Chang, 張怡雯
• Other Authors: Kuo-Tay Chen
• Format: Others
• Language: en_US
• Published: 2007
• Online Access: http://ndltd.ncl.edu.tw/handle/22470833105623447727

碩士 === 國立臺灣大學 === 會計學研究所 === 95 === With the development of the Internet and an increasing acceptance by its users, Internet gradually began to replace the print media and become a major information channel for investors to obtain corporate information. Requiring mandatory continuous information disclosure on the Market Observation Post System (MOPS) further increased the amount of information disclosed on the Internet. Since the relevant corporate operating information was already disclosed, when firms announce their annual reports, the difference between the annual report presentation and investor’s expectation is not large and therefore the abnormal return would be reduced. We employ event study methodology to compute the abnormal return of annual report announcement and regard it as the proxy for information content of annual reports to investigate whether management continuous information disclosure dilutes the information content of annual reports. The findings in accordance with our hypotheses suggest that requiring mandatory continuous information disclosure on the MOPS facilitated easy and fast access to corporate information and therefore reduced the abnormal returns of annual reports. Also, abolishing mandatory management financial forecasts diminished the amount of information captured by investors through financial forecasts and thus increased the abnormal returns of annual reports. Finally, the findings also indicate that firms with financial forecasts or being ranked as more transparent by Information Transparency and Disclosure Rankings System (ITDRS) have smaller abnormal returns of annual reports.