Prevalence of the Zero-Earnings Discontinuity in Quarterly Reported Earnings
研究了2002年萨班斯-奥克斯利法案通过后，季度盈余中零盈余间断现象是否持续存在，发现由于季度报表未经审计，该现象并未像年度盈余那样显著减弱。
We examine the persistence of the zero-earnings discontinuity in quarterly earnings around the adoption of the Sarbanes-Oxley Act in 2002. Previous studies find that the zero-earnings discontinuity in annual earnings disappears after the adoption of the Act, likely due to the stricter regulatory environment. We hypothesize that the adoption coincides with a relatively smaller reduction in the zero-earnings discontinuity in quarterly earnings, since interim financial statements are unaudited. Consistent herewith, we find that the zero-earnings discontinuity in quarterly earnings persists after the adoption of the Act. This is driven by the reduction in the zero-earnings discontinuities being weaker in magnitude for quarterly earnings compared to annual earnings. We find similar results using changes in earnings as well as analysts’ earnings forecast errors. Our findings are relevant for both regulators and academics in assessing the role of auditors in the adoption of SOX.