2011
DOI: 10.1111/j.1475-679x.2010.00396.x
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Large‐Sample Evidence on Firms’ Year‐over‐Year MD&A Modifications

Abstract: The Securities and Exchange Commission (SEC) has expressed concern about the informativeness of firms’ Management Discussion and Analysis (MD&A) disclosures. A firm's MD&A is potentially uninformative if it does not change appreciably from the previous year after significant economic changes at the firm. We introduce a measure for narrative disclosure—the degree to which the MD&A differs from the previous disclosure—and provide three findings on the usefulness of MD&A disclosure. First, firms w… Show more

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Cited by 562 publications
(367 citation statements)
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References 31 publications
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“…Financial literature has used tf-idf and cosine similarity measure to compare MD&A sections for modifications over time (Brown and Tucker 2011). One of the primary benefits of tf-idf is that it gives more weight to rare terms in a corpus and greatly diminishes the importance of words like "the" or "and".…”
Section: Linguistic Analysis Techniquesmentioning
confidence: 99%
See 1 more Smart Citation
“…Financial literature has used tf-idf and cosine similarity measure to compare MD&A sections for modifications over time (Brown and Tucker 2011). One of the primary benefits of tf-idf is that it gives more weight to rare terms in a corpus and greatly diminishes the importance of words like "the" or "and".…”
Section: Linguistic Analysis Techniquesmentioning
confidence: 99%
“…logistic regression and SVM) to test the ability of various measures to classify truthful vs. deceptive statements. Another interesting test I plan to conduct follows on the work of Brown and Tucker (2011), which finds that usefulness of MD&A statements decreased over time. Since these calls appear to have a lot in common with the MD&A, it seems reasonable that conference calls may also be decreasing in their usefulness as well.…”
Section: Post-hoc Analysesmentioning
confidence: 99%
“…The technique has had wide spread use in the areas of computer science and web development (Joydeep et al 2000). Recently studies in accounting and finance have used this technique to examine changes in firm's fundamentals and similarity in product market offerings (Brown andTucker 2011, Hoberg andPhillips 2016). The cosine similarity between two banks is the cosine of the angle between the vectors of words that comprise the combined BUS and MD&A.…”
Section: Text-based Measure Of Connectivitymentioning
confidence: 99%
“…Inclusion of this section is mandatory in the US and recommended in the UK (Clatworthy and Jones, 2003). The MD&A must cover certain topics but the depth at which these topics are discussed is upon a company's discretion (Brown and Tucker, 2011). In forms 10-K, the MD&A section is included in item 7.…”
Section: Selecting the 'Management Discussion And Analysis' Sectionmentioning
confidence: 99%
“…This information is included in all annual reports, but the depth of the information provided differs per company and annual report (Brown and Tucker, 2011 (Reporting, 1934). (Securities and Exchange Commission, 2014d).…”
Section: The Management Discussion and Analysismentioning
confidence: 99%