Guidance is an important and long-studied topic in the accounting literature. Call, Hribar, Skinner, and Volant (this issue) survey managers who provide guidance and those that do not to generate insights on the costs and benefits of providing guidance. For managers who do provide guidance, perceptions regarding guidance characteristics are elicited. Firm responses are connected to archival data sources, enabling cross-sectional analysis of survey responses and facilitating comparison of self-reported guidance with common guidance proxies in the archival literature. I discuss key insights from the survey, considering the limitations inherent in the survey method. I also clarify what is meant by the term guidance, how it differs from other forward-looking information and how researchers operationalize the guidance construct. I conclude by offering six research questions for future consideration based on the survey evidence.

We survey corporate managers of both guiding and non-guiding firms. We find that managers of firms that provide guidance say that they: (1) primarily provide guidance to satisfy analyst and investor demands and manage analysts’ earnings expectations; (2) are relatively unconcerned about proprietary or litigation costs (managers of non-guiding firms are more likely to see litigation risk as a concern); (3) predominantly issue guidance that is conservative relative to their internal expectations; (4) are concerned that guidance induces analysts and investors to focus on the short-term but not that it induces managers themselves to make myopic decisions internally. We also find that managers are miscalibrated about the accuracy of their guidance and that significant quantities of guidance that managers say their firms issue are not captured by conventional sources. We offer several other new insights relevant to the voluntary disclosure literature.

We examine how firms respond to requests for enhanced disclosure that we make on an online investor platform. Exploiting variation in firms' customer and supplier disclosures, we ask a randomized set of non-disclosing firms to provide information on their customers' and suppliers' identities. We find that the firms' probability of disclosure depends on the basis we give for the demand—requests appealing to disclosure's usefulness to investors lead to more frequent disclosure, while those appealing to regulators' preference for disclosure lead to less frequent disclosure. The requests we make on the platform lead to more frequent customer- and supplier-related inquiries from other platform users. We also find that the treatment firms' disclosure of customer and supplier information improves in the next period's regulatory filings. The findings suggest that investor platforms can enhance corporate transparency by increasing retail investors' ability to demand information.

Prior research finds that auditors' social connections with their clients harms audit quality. We examine auditors' social connections with members of their clients' business community, a setting in which auditors' connections may improve audit quality. While social ties within a client's business community should improve auditor competency, they also threaten auditor independence. We test the effects of auditors' network connections on audit quality using data from China, where data on social connections and individual auditors are available. Auditors' business connections should be particularly beneficial in a relational economy like China, where clients heavily rely on social networks for contracting. We find that auditors with strong local business and government connections deliver higher quality audits as evidenced by fewer financial irregularities among their clients. Our findings are consistent with the improved competency that arises from auditors' business connections outweighing the potential costs of impaired auditor independence.