We study how corporate boards and audit committees are associated with voluntary financial disclosure practices, proxied here by management earnings forecasts. We find that in firms with more effective board and audit committee structures, managers are more likely to make or update an earnings forecast, and their forecast is less likely to be precise, it is more accurate, and it elicits a more favorable market response. Together, our empirical evidence is broadly consistent with the notion that effective corporate governance is associated with higher financial disclosure quality.

Following the SRO rulings' requirement that analysts announce coverage terminations including either their final rating or the reason for the termination, we find 86.7 % of the voluntary terminations being attributed to ‘resources’ reallocation’ and only 13.3 % to firm poor outlook. Developing a classification algorithm to split the reallocation terminations into performance-based terminations (those driven by the dropped firm's poor outlook) and resource-constrained terminations (those unrelated to firm performance), we show that although the market's reaction to the termination announcement does not differ between the two sub-samples, future returns and financial performance of the performance-based sample significantly underperform those of the resource-constrained sample. We perform a number of additional analyses, including the use of terminations explicitly attributed to firm bleak output, to ex ante differentiate between the two types of reallocation terminations. We conclude that analysts withhold unfavorable news through the provision of news-neutral reasonings, in contrast to the regulators' intentions.

In this study we use the SEC's decision to eliminate the reconciliation requirement for cross-listed companies to examine whether this loss of information prompted financial analysts to provide more informative research reports. We first document that the informativeness of analyst earnings forecasts increased, on average, in the post-regulation period for the sample of firms that stopped providing the reconciliation information (regulated firms). We next relate this change in informativeness to stock liquidity, a common proxy for information asymmetry. We do not find any change in market liquidity for regulated firms with greater analyst informativeness in the post-regulation period. In contrast, we document a decrease in market liquidity for regulated firms with lower analyst informativeness. These results support the conjecture that, when analysts compensate for the loss of information, the firm's information environment is not affected. We conclude that analysts can play an important role in capital markets as information providers and that their research can be especially valuable in times of information shortage.