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.

We consider the dynamics of analyst inattention by investigating how analysts allocate their attention when a firm in their portfolio experiences CEO turnover. Our analysis shows that analysts tend to divert their attention toward firms that experience such events, resulting in less attention and a corresponding reduction in forecasting accuracy for nonevent firms. Furthermore, this reduction in accuracy varies with factors related to the costs and benefits of rationally allocating attention to firms that have experienced CEO turnover. Collectively, our analysis responds to the call for research on rational inattention among analysts and illustrates the specific intraportfolio events that alter attention allocation and information.