An important and more general quest

An important and more general question in disclosure is whether man- agers strategically manage the way firm performance (earnings news) is disclosed, particularly whether managers differentially manage the disclo- sure of good and bad news. This line of research goes back to Skinner’s [1994] findings that there is a strong asymmetry in the extent to which managers pre-announce earnings news (managers are significantly more likely to pre-announce adverse earnings news than other news), and extends more generally to accounting researchers’ interest in how managers’ accounting and disclosure decisions are affected by firm performance. Accounting researchers have long been interested in whether earnings are managed to shape investors’ perceptions of firm performance (e.g., see the large literature on income smoothing) as well as how managers’ reporting choices are related to their incentives to characterize news in a particular way (McVay [2006], Schrand and Walther [2000]).