Timeliness of earnings reports: A signalling approach

In this dissertation, five determinants of disclosure levels of financial information are identified. The timing of a signal and the characteristics of the signal generating function are two determinants that are typically under the control of management. These two determinants are proxied by the timing delay of information disclosure which is attributable to management and to the audit. Given the SEC disclosure requirements, managements' incentives to delay bad news are analyzed, and it is demonstrated that these incentives are negatively correlated with firm size.; Three major hypotheses are tested using a sample of 183 firms. The first issue concerns an examination of the determinants of reporting delay, where reporting delay is defined as unintentional audit delay and intentional management delay. Firm size and type of audit opinion (qualified or clean) are found to be related to reporting delay, with firm size determined to be a significant determinant of management delay.; The second hypothesis test for the magnitude of the securities market reaction to earnings announcements and other variables which relate to the reporting delay. It is shown that the market reacts negatively to intentional management delays of earnings announcement.; The final hypothesis examines the extent to which managers utilize their advance knowledge of the level of a firm's earnings in earning abnormal returns from insider trading. The results do not support this hypothesis.