We examine how GAAP‐based restrictions on managers' discretion over financial reporting influence financial statement users' efforts to acquire disclosure from management. During the question‐and‐answer part of a firm's conference call, we find that GAAP‐based restrictions are associated with more “account‐specific” questions by analysts (i.e., questions related to specific financial statement accounts). Managers appear to adjust current and future disclosure in response to analysts' questions, particularly when GAAP is restrictive: When an analyst asks a question about a particular account, managers are more likely to provide corresponding account‐specific information in their very next comment during the current call and in the presentation part of the next quarter's call. Furthermore, our tests suggest that when managers answer analysts' account‐specific questions, analysts' forecast quality is higher. Our study sheds light on the dynamic nature of the disclosure process between the constraints that managers face when preparing financial reports, users' efforts to acquire more financial statement information, and managers' provision of additional information. Overall, our findings suggest that users play an important role in triggering management disclosures and identifying the disclosures that are useful. Our analyses inform (1) standard setters, by showing that restrictions of reporting discretion shape not only mandatory reports but also the voluntary disclosure that emerges through manager–user interactions, and that restrictive GAAP may impose information acquisition costs on financial statement users; (2) managers, by showing that they can preempt the information deficiency created by restrictive GAAP through supplemental disclosure; and (3) analysts, by showing that they can achieve higher quality forecasts by actively soliciting information about accounts for which GAAP constrains what financial statements convey.

The digital evolution in auditing has triggered a rapid shift in auditors' required skill sets, with audit firms heavily investing in and extolling advanced data analytics and artificial intelligence (AI) capabilities. However, this strong emphasis on newly required digital skills can lead many experienced auditors, who perceive these competencies as their weaker areas, to feel disaffirmed in their abilities. We predict and find, across two experiments, that auditors who feel disaffirmed in their digital skills more defensively discount specialist advice that places higher versus lower reliance on AI, but that an intervention in which auditors affirm their traditional audit skills mitigates this defensive reaction. Absent self‐affirmation, higher specialist reliance on AI results in auditors denigrating the competence and quality of advice that specialists provide. These findings suggest that disaffirmation escalates AI aversion, offering important insights into how audit firms can foster less defensive decision‐making in the rapidly evolving audit environment.

Research has long recognized that institutional investors possess significant information processing advantages. Yet even these investors face limited‐attention constraints, implying that periods of distraction may attenuate their advantage. We examine the effects of a plausibly exogenous shock to institutional attention arising from the annual buy‐side‐focused Equity Research and Valuation (ERV) conference for Chartered Financial Analysts on institutions' information processing at earnings announcements. Validation tests using conference call data indicate that fewer buy‐side analysts are present on earnings calls during ERV conferences and that questions are shorter, consistent with the presence of substitute or backup analysts. In our main analyses, we find that buy‐side analyst inattention reduces information asymmetry among investors and improves liquidity at these earnings announcements, consistent with theory, and observe similar results for non–earnings announcement events. In additional tests, we document slower price formation, but also more profitable retail trading, during these periods. Collectively, we provide novel evidence on the market consequences of institutional inattention during key information events.