The Tone from Above: The Effect of Communicating a Supportive Regulatory Strategy on Reporting Quality

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Abstract

In collaboration with the Authority for the Financial Markets in the Netherlands, we manipulate the content of official letters that instruct financial intermediaries to submit a mandatory self-assessment. As part of the Registered Report Process, we submitted our hypotheses, experimental procedure, and planned statistical analyses before data collection. We predicted that a request indicating a supportive regulatory attitude has a positive effect on reporting quality on average. We also predicted this effect to be stronger for small firms and for firms with a long-term orientation, and to become negative for firms with a short-term orientation. Planned analyses show that a supportive letter reduced reporting quality unless firms had a long-term orientation, supporting the moderating influence of time horizon, but providing no support for the expected average effect or for moderation by firm size.

Original languageEnglish
Pages (from-to)467-519
Number of pages53
JournalJournal of Accounting Research
Volume56
Issue number2
DOIs
Publication statusPublished - May 2018

Keywords

  • G28
  • K42
  • M48
  • reporting quality
  • responsive regulation
  • support
  • time horizon

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