Did accelerated filing requirements and SOX Section 404 affect the timeliness of 10-K filings?

Joost Impink; Martien Lubberink; Bart van Praag; David Veenman

doi:10.1007/s11142-011-9172-5

Did accelerated filing requirements and SOX Section 404 affect the timeliness of 10-K filings?

Joost Impink¹; Martien Lubberink^2,3,4; Bart van Praag; David Veenman^5,6

¹ University of Florida · ² Victoria University of Wellington · ³ Lancaster University · ⁴ De Nederlandsche Bank · ⁵ University of Amsterdam · ⁶ Erasmus University Rotterdam

Review of Accounting Studies 2012 open access

This paper examines the effect of Sarbanes-Oxley provisions on 10-K filing delays. We find that tightened filing deadlines for accelerated and large accelerated filers are not associated with changes in the incidence of late filing. While Section 404 compliance does not affect filing timeliness for firms with effective internal controls, we find that about half the firms disclosing internal control weaknesses are late filers. As a consequence, many Section 404 material weakness firms experience negative abnormal returns around late filing notifications before filing the 10-K. Lastly, we find that market reactions to late filing notifications are more negative when management provides no meaningful explanation for the delay, consistent with managers’ incentives to withhold bad news.

DOI: 10.1007/s11142-011-9172-5
Volume: 17 (2)
Pages: 227-253
Language: en
Export: BibTeX
Sources: crossref openalex