Work

Proximity to the SEC and Stock Price Crash Risk

Year: 2015

Type: article

Abstract: We explore the possibility that Securities Exchange Commission (SEC) oversight influences disclosure practices in a manner that reduces the likelihood of individual stock price crashes. Firms located farther from the SEC have greater stock price crash risk and this result is more pronounced for firms with financial statements that are less readable (those with larger 10‐K filings) and more pronounced when SEC budgets are relatively smaller. Similar results are obtained in response to SEC regional office location changes that are more likely to be exogenous. Our results suggest that SEC oversight induces disclosure practices that reduce the likelihood of large negative disclosures.

Source: Financial Management

DOI: 10.1111/fima.12122

Authors: Thomas R. Kubick, G. Brandon Lockhart

Institutions: University of Nebraska–Lincoln, University of Kansas, Clemson University

Language: English

Topic: Auditing, Earnings Management, Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W2180636705

FWCI: 11.78

Cites: 53

Cited by: 104

Related to: 10