After the passage of the Sarbanes-Oxley Act of 2002, the Securities and Exchange Commission recommended that companies voluntarily adopt disclosure committees to aid in preparing company disclosures. In this paper, I investigate the determinants and consequences of disclosure committee adoption. I find that companies with material weaknesses in internal controls over financial reporting and less readable 10-K filings are more likely to adopt disclosure committees. In consequences analyses, using a propensity score matched control sample and a difference-in-differences research design, I find that 10-K filings are longer and less readable after disclosure committee adoption. However, consistent with institutional theory, I do not find evidence of a reduction in information asymmetry or an increase in the informativeness of earnings following disclosure committee adoption.
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"]},{"key":"dc:title","label":"Title","values":["The Determinants and Consequences of Disclosure Committee Adoption"]}]}],"canonical_facts":{"dc:contributor":["Cassell, Cory A.","Myers, James N."],"dc:contributor.advisor":["Myers, Linda A."],"dc:creator":["Schmardebeck, Lyle Roy"],"dc:date":["2015"],"dc:date.available":["2017-09-29T07:00:00Z"],"dc:description.abstract":["After the passage of the Sarbanes-Oxley Act of 2002, the Securities and Exchange Commission recommended that companies voluntarily adopt disclosure committees to aid in preparing company disclosures. In this paper, I investigate the determinants and consequences of disclosure committee adoption. I find that companies with material weaknesses in internal controls over financial reporting and less readable 10-K filings are more likely to adopt disclosure committees. In consequences analyses, using a propensity score matched control sample and a difference-in-differences research design, I find that 10-K filings are longer and less readable after disclosure committee adoption. However, consistent with institutional theory, I do not find evidence of a reduction in information asymmetry or an increase in the informativeness of earnings following disclosure committee adoption.
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