Anne Beyer

Bio: Anne Beyer is an academic researcher from Stanford University. The author has contributed to research in topics: Earnings & Voluntary disclosure. The author has an hindex of 21, co-authored 28 publications receiving 3627 citations. Previous affiliations of Anne Beyer include Northwestern University.

The Financial Reporting Environment: Review of the Recent Literature

Abstract: The corporate information environment develops endogenously as a consequence of information asymmetries and agency problems between investors, entrepreneurs, and managers. We provide a framework for analyzing the three main decisions that shape the corporate information environment in a capital markets setting: (1) managers’ voluntary reporting and disclosure decisions, (2) reporting and disclosures mandated by regulators, and (3) reporting decisions by third-party intermediaries (analysts). We review current research on disclosure regulation, information intermediaries, and the determinants and economic consequences of corporate disclosure and financial reporting decisions. We conclude that in the last ten years, research has generated a number of useful insights. Despite this progress, we call for researchers to consider interdependencies between the various decisions that shape the corporate information environment and highlight changes in the economic financial environment that raise new and interesting issues for researchers to address.

Capital Structure, Cost of Capital, and Voluntary Disclosures

Abstract: This paper develops a model of financing that jointly determines a firm's capital structure, its voluntary disclosure policy, and its cost of capital. Investors who receive securities in return for supplying capital sometimes incur losses when they trade their securities with an informed trader. The firm's disclosure policy and the structure of its securities determine the information advantage of the informed trader, and hence the size of investors' trading losses and the firm's cost of capital. We establish a hierarchy of optimal securities and disclosure policies that varies with the volatility of the firm's cash flows. Debt securities are often optimal, with the form of debt -- risk-free, investment grade, or "junk" -- varying with the firm's cash flow volatility. Though the model predicts a negative association between firms' cost of capital and the extent of information firms disclose, more expansive voluntary disclosure does not cause firms' cost of capital to decline. Mandatory disclosures alter firms' voluntary disclosures, their capital structure choices, and their cost of capital.

Capital structure, cost of capital, and voluntary disclosures

Abstract: This paper develops a model of financing that jointly determines a firm’s capital structure, its voluntary disclosure policy, and its cost of capital. Investors who receive securities in return for supplying capital sometimes incur losses when they trade their securities with an informed trader. The firm’s disclosure policy and the structure of its securities determine the information advantage of the informed trader and, hence, the size of investors’ trading losses and the firm’s cost of capital. We establish a hierarchy of optimal securities and disclosure policies that varies with the volatility of the firm’s cash flows. Debt securities are often optimal, with the form of debt—risk-free, investment grade, or “junk”—varying with the firm’s cash flow volatility. Though the model predicts a negative association between firms’ cost of capital and the extent of information firms disclose, more expansive voluntary disclosure does not cause firms’ cost of capital to decline. Mandatory disclosures al...

Reputation Management and the Disclosure of Earnings Forecasts

Abstract: In this paper, managers differ from each other in terms of the probability that they are "forthcoming" (and disclose all the earnings forecasts they receive) or "strategic" (and disclose the earnings forecasts they receive only when it is in their self-interest to do so). Strategic managers choose whether to disclose their forecasts based on both the disclosure's effects on their firms' stock price and on their reputation among investors for being forthcoming.Our findings include strategic managers can build a reputation for being forthcoming by disclosing unfavorable forecasts; managers' incentive to build a reputation for being forthcoming may be so strong that they disclose even the most negative forecasts; as managers become more concerned about their reputation: (a) the current price of the firm in the event the manager makes no forecast increases; (b) managers who have a high probability of behaving strategically (as forthcoming) in the future issue forecasts more (less) often in the present.

The Financial Reporting Environment: Review of the Recent Literature

Abstract: The corporate information environment develops endogenously as a consequence of information asymmetries and agency problems between investors, entrepreneurs, and managers. We provide a framework for analyzing the three main decisions that shape the corporate information environment in a capital markets setting: (1) managers’ voluntary reporting and disclosure decisions, (2) reporting and disclosures mandated by regulators, and (3) reporting decisions by third-party intermediaries (analysts). We review current research on disclosure regulation, information intermediaries, and the determinants and economic consequences of corporate disclosure and financial reporting decisions. We conclude that in the last ten years, research has generated a number of useful insights. Despite this progress, we call for researchers to consider interdependencies between the various decisions that shape the corporate information environment and highlight changes in the economic financial environment that raise new and interesting issues for researchers to address.

A Review of Archival Auditing Research

Abstract: We define higher audit quality as greater assurance of high financial reporting quality. Researchers use many proxies for audit quality, with little guidance on choosing among them. We provide a framework for systematically evaluating their unique strengths and weaknesses. Because it is inextricably intertwined with financial reporting quality, audit quality also depends on firms’ innate characteristics and financial reporting systems. Our review of the models commonly used to disentangle these constructs suggests the need for better conceptual guidance. Finally, we urge more research on the role of auditor and client competency in driving audit quality.

Relying on the Information of Interested Parties

Abstract: We investigate the conventional wisdom that competition among interested parties attempting to influence a decision maker by providing verifiable information brings out all the relevant information. We find that, if the decision maker is strategically sophisticated and well informed about the relevant variables and about the preferences of the interested party or parties, competition may be unnecessary; while if the decision maker is unsophisticated or not well informed, competition is not generally sufficient. However, if the interested parties' interests are sufficiently opposed, or if the decision maker is seeking to advance the parties' decision maker's need for prior knowledge about the relevant variables and for strategic sophistication. In other settings, only the combination of competition among information providers and a sophisticated skepticism is sufficient to allow defective decision making.