对信息披露和财务报表关注的有限性文献翻译Word格式.docx

1、外 文 翻 译题 目 我国上市公司资产质量信息的披露研究 专 业 会 计 学 外文题目 Limited attention, Information Disclosure and Financial Reporting 外文出处 Fisher College of Business 外文作者 David Hirshleifer and Siew Hong Teoh 原文：Limited attention, Information Disclosure and Financial ReportingAbstractThis paper models firms choices between

2、alternative means of presenting information, and the effects of different presentations on market prices when investors have limited attention and processing power. In a market equilibrium with partially attentive investors, we examine the effects of alternative: levels of discretion in pro forma ea

3、rnings disclosure, methods of accounting for employee option compensation, and degrees of aggregation in reporting. We derive empirical implications relating pro forma adjustments, option compensation, the growth, persistence, and informativeness of earnings, short-run managerial incentives, and oth

4、er firm characteristics to stock price reactions, misevaluation, long-run abnormal returns, and corporate decisions.Key Words: limited attention, behavioral accounting, investor psychology, capital markets, accounting regulation, disclosure, market efficiency1 IntroductionFirms and regulators care n

5、ot just about the information made publicly available to investors, but the form in which it is revealed. One issue of great concern to practitioners is whether information items should be recognized as part of earnings, or merely disclosed as a footnote. Another is the prominence with which differe

6、nt kinds of information are displayed in financial statements. There is also intense concern as to the form of disclosure, even when the information content of the alternative formats is identical. Evidently regulators and commentators think that investors are imperfect processors of publicly availa

7、ble information. Such concerns are reflected in the structure of accounting regulation, and in politically charged debates over such issues as merger accounting, whether employee option compensation should be expensed, and to what extent firms should be free to make pro forma disclosures that differ

8、 from GAAP definitions of earnings.In contrast, in existing analytic research on financial reporting, the choice between recognition versus disclosure, and between equivalent forms of disclosure or reporting, has no effect on investor perceptions. In existing models of reporting, investors are fully

9、 rational, and market prices are set efficiently to reflect all publicly available information. This approach has provided important insights into the interplay of financial reporting, optimal contracts, and capital markets. However, from the perspective of this traditional approach, the passionate

10、interest of practitioners in the regulation of informationally equivalent disclosures and reports is a major puzzle.This paper offers an approach to the analytical modeling of financial reporting and disclosure that encompasses these issues. Our approach departs from existing theory in assuming that

11、 investors have limited attention and processing power. An immediate but far-reaching consequence of limited attention is that informationally equivalent disclosures can have different effects on investor perceptions, depending on the form of presentation. Limited attention has implications for non-

12、equivalent disclosures as well.In our model, owing to limits to investor attention, information that is presented in salient, easily processed form is assumed to be absorbed more easily than information that is less salient, or that is only implicit in the public information set. Thus, investors neg

13、lect relevant aspects of the economic environments they face. For example, investors may neglect the distinctive features of different divisions of a diversified firm, or may not adequately adjust their interpretations of disclosures to take into account the strategic incentives of firms to manipula

14、te observers perceptions. We model these possibilities by assuming that each investor has only a probability of attending to the relevant consideration. Furthermore, we assume that investors are risk averse, so that highly attentive investors are limited in the extent to which they are willing to be

15、ar risk in order to exploit mispricing.Inattention seems foolish in our setting, as inattentive investors lose money by ignoring aspects of the economic environment. However, if time and attention are costly, such behavior may be reasonable.To display some of the range of relevance of limited attent

16、ion for reporting and for reporting-related disclosure, we apply this approach to three specific contexts. These applications show how the approach can help explain puzzling stylized facts, generate untested empirical implications, and suggest possible considerations for policy. The modeling is star

17、k, and we hope will stimulate more general analyses of the consequences of limited attention and reporting choices.The first application is to pro forma earnings disclosure. We consider the effect of discretion in firms disclosure of non-GAAP earnings measures in pro forma earnings announcements. We

18、 find that pro forma disclosures bias investors perceptions upwards, yet can make stock prices more accurately reflect fundamental value.The second application is to an issue of timing allocation, the possible reporting of employee stock option compensation as an expense at the time that the options

19、 are granted. We take as a premise that the compensation must be disclosed up front, and examine how the failure to expense this compensation prior to option exercise can cause overvaluation, and induce a relation between the size of this compensation and subsequent abnormal stock returns. However,

20、the analysis also predicts that full expensing of these options would cause market undervaluation, consistent with the vigorous protests of high-tech firms against the expensing of these options. Surprisingly, the analysis further implies that the expensing rule that supports accurate market valuati

21、ons depends on the persistence of earnings. A similar implication would also apply more generally to the expensing of accounting items when lumpy expenditures generate benefits over several subsequent reporting periods.The final application is to an issue of aggregation in financial reporting. We ex

22、amine the effects on investor perceptions of segment reporting versus aggregate reporting versus divestiture in a diversified firm. We find that during periods of high foreseen general earnings growth, investors who focus on the recent growth rate of a firms aggregate earnings will tend to overweigh

23、t low growth segments at the expense of high growth segments, and in consequence will tend to undervalue the firm. More importantly, the model suggests a direction for analyzing reporting aggregation when attention is limited.There is a remarkable disjunction in the accounting literature between the

24、 experimental research versus analytical models of financial information processing. Experimental research has provided a provocative array of evidence that both naive and sophisticated investors and professional analysts are systematically biased in their interpretation of accounting data, and that

25、 these biases affect market prices. As Libby, Bloomeld, and Nelson （2002） describe the evidence, the information that decision makers rely upon in their judgments is limited, and the information emphasized clearly changes depending on the financial judgment being made, and other elements of the envi

26、ronment. In fact, awareness of cosmetic differences （and ability to do the math） does not ensure full consideration of their implications for valuation. The same is true of knowledge of managements tendency to opportunistically employ vague reporting standards or analysts tendency to bias their repo

27、rts.Furthermore, in an insightful recent discussion, Bloomeld （2002） suggests that failures in information processing can help explain empirical patterns related to accounting information.In contrast, analytical models of disclosure and reporting, often published in the same journals without referen

28、ce to the experimental literature, have almost uniformly assumed full rationality of decisions and pricing. One goal of this paper is to begin the search for complementarities between the insights derived from experimental study and through analytical modeling in accounting.There are some important

29、exceptions to the assumption of perfect information processing in accounting models of reporting or disclosure. Bushman, Gigler, and Indjejikian（1996） analyze the effects of SEC proposals for two-tiered financial reporting when investors process financial reports in order to generate private informa

30、tion. Our focus is not on skill in generating new private signals, but on investors failure to take into account certain aspects of their decision environment.In the heuristic trading models of disclosure of Fischer and Verrecchia （1999） and Verrecchia （2001）, heuristic investors are assumed to eith

31、er under- or over-react to an information signal. Fischer and Verrecchia then explore the conditions under which heuristic investors can survive in competition with rational Bayesian investors. They offer a general analysis of the profitability of different forms of irrational trading. Their analysi

32、s implicitly allows for limited attention by allowing for the possibility that some investors under react to the public signal.We build upon these important contributions by allowing for forms of investor errors not present in the heuristic trader models. In our approach, errors derive from a failure of investors to attend to some non-salient or hard-to-process aspect of the economic environment, which need not be a newly-arrived signal （see also footnote 3）. Our modeling focus is also different; we examine the effects of limited attention in specific disclosure and repo