• Abstract and Figures
• Public Full-text

THE INCREMENTAL INFORMATION CONTENT OF THE ANNUAL REPORT TO SHAREHOLDERS AND THE TEN-K Item Type text; Dissertation-Reproduction (electronic) Authors Jenkins, David Randall Publisher The University of Arizona. Rights Copyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author. Download date 04/10/2021 07:55:30 Link to Item http://hdl.handle.net/10150/282017 INFORMATION TO USERS This was produced from a copy of a document sent to us for microfilming. While the most advanced technological means to photograph and reproduce this document have been used, the quality is heavily dependent upon the quality of the material submitted. The following explanation of techniques is provided to help you understand markings or notations which may appear on this reproduction. 1. The sign or "target" for pages apparently lacking from the document photographed is "Missing Page(s)". If it was possible to obtain the missing page(s) or section, they are spliced into the film along with adjacent pages. This may have necessitated cutting through an image and duplicating adjacent pages to assure you of complete continuity. 2. When an image on the film is obliterated with a round black mark it is an indication that the film inspector noticed either blurred copy because of movement during exposure, or duplicate copy. Unless we meant to delete copyrighted materials that should not have been filmed, you will find a good image of the page in the adjacent frame. If copyrighted materials were deleted you will find a target note listing the pages in the adjacent frame. 3. When a map, drawing or chart, etc., is part of the material being photo­ graphed the photographer has followed a definite method in "sectioning" the material. It is customary to begin filming at the upper left hand corner of a large sheet and to continue from left to right in equal sections with small overlaps. If necessary, sectioning is continued again—beginning below the first row and continuing on until complete. 4. For any illustrations that cannot be reproduced satisfactorily by xerography, photographic prints can be purchased at additional cost and tipped into your xerographic copy. Requests can be made to our Dissertations Customer Services Department. 5. Some pages in any document may have indistinct print. In all cases we have filmed the best available copy. University Microfilms International 300 N. ZEEB RD., ANN ARBOR, Ml 48106 8128332 JENKINS, DAVID RANDALL THE INCREMENTAL INFORMATION CONTENT OF THE ANNUAL REPORT TO SHAREHOLDERS AND THE TEN-K The University of Arizona PH.D. 1981 University Microfilms International 300 N. Zeeb Road, Ann Arbor, MI 48106 PLEASE NOTE: In all cases this material has been filmed in the best possible way from the available copy. Problems encountered with this document have been identified here with a check mark V . 1. Glossy photographs or pages 2. Colored illustrations, paper or print 3. , Photographs with dark background 4. Illustrations are poor copy 5. Pages with black marks, not original copy 6. Print shows through as there is text on both sides of page 7. Indistinct, broken or small print on several pages ^ 8. Print exceeds margin requirements 9. Tightly bound copy with print lost in spine 10. Computer printout pages with indistinct print 11. Page(s) lacking when material received, and not available from school or author. 12. Page(s) seem to be missing in numbering only as text follows. 13. Two pages numbered . Text follows. 14. Curling and wrinkled pages 15. Other University Microfilms International THE INCREMENTAL INFORMATION CONTENT OF THE ANNUAL REPORT TO SHAREHOLDERS AND THE 10-K by David Randall Jenkins A Dissertation Submitted to the Faculty of the COMMITTEE ON BUSINESS ADMINISTRATION In Partial Fulfillment of the Requirements For the Degree of DOCTOR OF PHILOSOPHY In the Graduate College THE UNIVERSITY OF ARIZONA 19 81 THE UNIVERSITY OF ARIZONA GRADUATE COLLEGE As members of the Final Examination Committee, we certify that we have read the dissertation prepared by David Randall Jenkins entitled The Incremental Information Content of the Annual Report to Shareholders and the 10-K. and recommend that it be accepted as fulfilling the dissertation requirement or the Degree of Doctor of Philosophy _• V-. Mil/2 Date Date Date Date Final approval and acceptance of this dissertation is contingent upon the candidate's submission of the final copy of the dissertation to the Graduate College. I hereby certify that I have read this dissertation prepared under my direction and recommend that it be accepted as fulfilling the dissertation requirement. Dissertation Direcy^ Date STATEMENT BY AUTHOR This dissertation has been submitted in partial fulfillment of requirements for an advanced degree at The University of Arizona and is deposited in the University Library to be made available to borrowers under rules of the Library. Brief quotations from this dissertation are allowable without special permission, provided that accurate ackowledgment of source is made. Requests for permission for extended quotation from or reproduction of this manuscript in whole or in part may be granted by the head of the major department or the Dean of the Graduate College when in his judgment the proposed use of the material is in the interests of scholarship. In all other instances, however, permission must be obtained from the author. SIGNED ACKNOWLEDGMENTS I wish to express my gratitude to the members of my dissertation committee, Professors Don W. Vickrey, Taylor W. Foster III and Russell M. Barefield for their comments, suggestions and their contribution to the success of the empirical study. I also wish to express appreciation to Professor Timothy L. Shaftel for his persistent encouragement. I am grateful for the financial assistance received from the Gifts and Grants Committee of the Ledger and Quill alumni association at DePaul University, Chicago, Illinois. Appreciation is also expressed to Julie Singleton Shaftel, for proofreading this manuscript, to Patricia Koogler, for her library research and keypunching assistance, and to all my friends and relatives for their aid in the task of mailing and processing questionnaires. Further, I extend my thanks to responding firms described in APPENDIX C. This study would not have been possible without these efforts. I am grateful to my wife, Renee and my children, Jennifer, Scott, Brandon and Joshua, for their unending patience and tolerance over the last three years. Their continuing support has been invaluable. Now that this dissertation is complete I must repay them. I am sure they are ready to collect. iii To my Mother, Lois, who has shared this dream with me. In memory of Harry Sperber, who helped me understand one could achieve whatever one conceived. TABLE OF CONTENTS Page LIST OF TABLES viii LIST OF ILLUSTRATIONS x ABSTRACT xi CHAPTER 1 OBJECTIVES OF THE DISSERTATION 1 Importance of the Dissertation 4 Wealth Effects of the ARS and the 10-K 4 The Rationale for Disclosure 6 Justification and Social Desirability for Disclosure 7 The Social Welfare Postulate and Disclosure Regulation 9 Policy-Maker Evaluation... 10 The Usefulness Controversy 11 Limitations of the Investigation 15 Organization Plan of the Study '. 16 2 THE USEFULNESS OF THE ARS AND 10-K 19 Usefulness 19 AAA 20 AICPA 22 FASB 25 SEC 28 The Usefulness of the ARS 31 Lee and Tweedie 32 Epstein 32 Lee and Tweedie.... 34 Buzby 35 Stanga 35 Pankoff and Virgil. 36 Craig 38 Anecdotal Remarks 38 The Usefulness of the 10-K 39 Singhvi 40 Foster and Vickrey 40 Gonedes 42 v vi TABLE OP CONTENTS—Continued Benston. 45 Anecdotal Remarks 50 Summary. ........ 51 3 ANALYTICAL FRAMEWORK.... 54 The Development of Portfolio Theory and the Market Model.... 55 Markowitz 55 Sharpe..... 60 Capital Market Theory and the Capital Asset Pricing Model 65 Capital Market Theory 66 CAPM 71 Capital Market Theory Implications for Accounting 77 Summary 81 4 METHODOLOGY 83 Precedents and Justification for Analytical Techniques to be Employed in the Dissertation 83 Precedent for the Unexpected Return Methodology 84 Rationale for the Beta-Shift Technique » 87 Specific Dissertation Analytical Techniques 88 Commonalities 89 The Beta-Shift Technique..... 102 The Unexpected Return Methodology 107 Summary Ill 5 PROCEDURE 116 Data Gathering 116 ARS Mailing Dates..... 117 10-R Receipt Dates 118 Application of Sample Selection Criteria 119 ARS SSC 119 10-K SSC 121 Forming Weekly Returns..... 124 Forming and Fitting Regression Equations 125 ARS Regression Fit 127 10-K Regression Fit 128 vii TABLE OP CONTENTS—Continued Quandt Log-Likelihood Ratio 129 ARS 129 10-K 130 The Chow Test 132 ARS Chow Test... 133 10-K Chow Test 133 Generating Unexpected Returns 136 Summary 136 6 ANALYSIS OF RESULTS 141 ARS Analysis 141 The Beta-Shift Technique 142 Unexpected Return Analysis......... 143 10-K Analysis 149 The Beta-Shift Technique 150 Unexpected Return Analysis 151 Summary 157' 7 CONCLUSION . 160 Background of the Dissertation 160 The Empirical Investigation 163 Implications of the Results of the Study 170 Suggestions for Future Research 171 APPENDIX A: COVER LETTER AND QUESTIONNAIRE 173 APPENDIX B: SOLICITED NYSE FIRMS 175 APPENDIX C: RESPONDING NYSE FIRMS 206 APPENDIX D: ARS SAMPLE 226 APPENDIX E: 10-K SAMPLE „.. 233 LIST OF TABLES Table Page 2.1. Epstein's Shareholder Decision Basis 33 5.1. ARS Sample Firm Mailing Dates 121 5.2. 10-K Sample Firm Receipt Dates 123 5.3. ARS Kendall and Spearman Statistics 127 5.4. 10-K Kendall and Spearman Statistics 128 5.5. ARS Sample Quandt Log-Likelihood Ratio Most Likely Week for Parameter Change 130 5.6.

Load more

  259

Copy Link