SEC comment letters and firm disclosure

Bozanic, Zahn; Dietrich, J. Richard; Johnson, Bret

doi:10.1016/j.jaccpubpol.2017.07.004

Cited by 176 publications

(93 citation statements)

References 25 publications

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“…CLs therefore are an important part of SEC oversight. In this light, a number of recent studies have investigated the determinants and consequences of CLs (e.g., Cassell et al 2013;Bozanic et al 2015;Johnston and Petacchi 2014;Dechow et al 2016). These studies have not, however, examined the relation between firm PC and the likelihood of receiving CLs.…”

Section: Introductionmentioning

confidence: 99%

“…This paper contributes to the accounting literature on regulation and the political process by presenting a fuller picture of the role of firm political connections in SEC oversight. We also contribute to the growing literature on CL determinants and consequences (e.g., Cassell et al 2013;Bozanic et al 2015;Johnston and Petacchi 2014;Dechow et al 2016). By focusing on how firm PC affects the likelihood of receiving CLs, we extend the economic analysis of CL activity into the political domain.…”

Section: Introductionmentioning

confidence: 99%

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Is the SEC captured? Evidence from comment-letter reviews

Heese

Khan

Ramanna

2017

Journal of Accounting and Economics

149

100

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SEC oversight of publicly listed firms ranges from comment letter (CL) reviews of firms' reporting compliance to pursuing enforcement actions against violators. Prior literature finds that firm political connections (PC) negatively predict enforcement actions, inferring SEC capture. We present new evidence that firm PC positively predict CL reviews and substantive characteristics of such reviews, including the number of issues evaluated and the seniority of SEC staff involved. These results, robust to identification concerns, are inconsistent with SEC capture and indicate a more nuanced relation between firm PC and SEC oversight than previously suggested.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Is the SEC captured? Evidence from comment-letter reviews

Heese

Khan

Ramanna

2017

Journal of Accounting and Economics

149

100

View full text Add to dashboard Cite

show abstract

“…We also contribute to the growing literature on CL determinants and consequences (e.g., Cassell et al 2013;Bozanic et al 2015;Johnston and Petacchi 2014;Dechow et al 2016). By focusing on how firm PC affects the likelihood of receiving CLs, we extend the economic analysis of CL activity into the political domain.…”

Section: Introductionmentioning

confidence: 99%

Is the SEC Captured? Evidence from Comment-Letter Reviews

Heese

Khan²,

Ramanna

2017

SSRN Journal

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“…We state our hypothesis in the alternative as follows:Hypothesis The quality of SEC comment letters issued for periodic reports decreases when there are unexpected spikes of transactional filings within each industry office .However, there are several reasons why unexpected increases in transactional filings may not affect the quality of the comment letter process. First, in the years since SOX, reviews of periodic reports have increased both in number and in importance (Bozanic et al ), with the DCF continually exceeding its annual goal of reviewing one‐third of all periodic reports . This suggests that the DCF may have a process for balancing the review of both periodic reports and transactional filings.…”

Section: Hypothesis Developmentmentioning

confidence: 99%

Unexpected SEC Resource Constraints and Comment Letter Quality

Ege

Glenn

Robinson

2019

Contemporary Accting Res

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We investigate whether reviews of transactional filings by the SEC unexpectedly constrain SEC resources, leading to lower quality comment letters for periodic reports. The Sarbanes‐Oxley Act requires the SEC to review periodic reports (e.g., 10‐Ks) at least once every three years. However, the SEC also reviews transactional filings (e.g., initial public offerings and acquisitions), which are unpredictable and often occur in waves. We find comment letters for periodic reports are of lower quality (in terms of outputs, inputs, and firm responses) during periods of abnormally high transactional filings. We also find that comment letters issued during periods of abnormally high versus low transactional filings are associated with increased information asymmetry and lower earnings response coefficients in the quarter after the resolution of the comment letter. Overall, our results suggest that unexpected resource constraints affect the quality of SEC oversight of periodic reports.

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SEC comment letters and firm disclosure

Cited by 176 publications

References 25 publications

Is the SEC captured? Evidence from comment-letter reviews

Is the SEC captured? Evidence from comment-letter reviews

Is the SEC Captured? Evidence from Comment-Letter Reviews

Unexpected SEC Resource Constraints and Comment Letter Quality

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