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Capital market response to high quality annual reporting: evidence from UK annual report awards

Research output: Contribution to Journal/MagazineJournal articlepeer-review

Published
<mark>Journal publication date</mark>15/01/2024
<mark>Journal</mark>Accounting and Business Research
Issue number2
Volume45
Number of pages43
Pages (from-to)1-43
Publication StatusPublished
Early online date5/09/22
<mark>Original language</mark>English

Abstract

We examine the capital market response to the publication of annual reports shortlisted for corporate reporting awards. We find weaker capital market reactions to the publication of shortlisted annual reports compared with a matched sample of non-shortlisted annual reports, consistent with shortlisted reports containing similar or less price sensitive information relative to non-shortlisted reports. Further analysis shows that firms publishing shortlisted reports are more likely to release information to investors in a timelier manner throughout the financial year. We complement our archival empirical analysis with interview evidence from FTSE350 executives and consultants to shed light on the motives for investing in high-quality annual reports. Collectively, our results support the view that high quality annual reporting reflects superior firm-level investor communication processes and that the broader corporate reporting cycle shapes the information role of firm reporting.