Misstatement verifiability and managers’ earnings warning decisions
研究利用1996至2019年证券集体诉讼数据，发现盈利预警与前瞻性披露中错误陈述的可验证性正相关，且该关系受高管团队中法律顾问、事前诉讼风险及内部人交易等因素影响，表明经理人通过盈利预警降低诉讼成本。
We examine whether the verifiability of misstatements in prior forward-looking earnings disclosures contributes to managers’ decisions to issue earnings warnings. Using securities class action lawsuits from 1996 to 2019 pertaining to forward-looking earnings disclosures, we find that earnings warnings are positively associated with the verifiability of misstatements in such disclosures. The results survive entropy balancing and firm-fixed effects to mitigate endogeneity concerns. The positive relation between earnings warnings and misstatement verifiability is more pronounced for firms 1) with a general counsel in the top management team and 2) that face higher ex-ante litigation risk, and less pronounced for firms whose managers engaged in insider selling during the class action lawsuit period. We also show that earnings warnings help to increase the likelihood of a lawsuit dismissal (i.e., lowering litigation costs) when the lawsuit involves misstatements that are more (rather than less) verifiable. Taken together, our findings suggest that managers issue earnings warnings when it helps to reduce litigation costs, consistent with the notion that managers can achieve a greater reduction in litigation costs by issuing earnings warnings.