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The aim of this paper is to investigate the impact of voluntary disclosure on information asymmetry between investors and the average information content of subsequent the earnings announcement.

The authors use empirical methodology relying on multiple regression analyses. The authors estimate models of trading volume and stock returns around the earnings’ release date as a function of voluntary disclosures, measured using information in the 8-K statements.

Voluntary disclosures prior to the earnings release date increase trading volume related to stock returns. In addition, voluntary disclosures also reduce stock price movement around that date.

The results indicate that voluntary disclosures increase trading volume related to stock returns around the earnings release date. Such increases indicate increased differential precision among investors, demonstrating that voluntary disclosures increase differences in opinion among investors. The reduced stock price movement around the earnings release date also show that voluntary disclosures reduce the information content of earnings. One limitation is that the measure of voluntary disclosures does not consider the variation in the information content of individual disclosures.

Firms who make voluntary disclosures will need to carefully consider how to structure such releases to minimize asymmetry between investors. Investors should pay greater attention to finding out, and interpreting, voluntary disclosures by firms.

Regulators have previously expressed concern about leveling the playing field between more and less informed investors. The results showing increased differences in information as a result of voluntary disclosures provide valuable insights as regulators debate the balance of mandated and voluntary disclosure.

This is the first study to investigate the effect of voluntary disclosures on information asymmetry among investors using trading volume and, consequently, the first to find increased differences among investors that result from those voluntary disclosures. The paper is also the first to use a direct measure of voluntary disclosure developed by Cooper et al. to demonstrate the negative relation between voluntary disclosure and the average informativeness of earnings announcements.

The purpose of this paper is to contribute to the sociology of financial analysis by exploring how sell-side analysts enact their professional roles during public earnings presentations. It addresses the following research question: How do analysts perform their professional roles in interactions with managers, fund managers and other analysts?

The research adopts a dramaturgical analysis of analysts’ interactions with managers and fund managers. The empirical material includes 50 hours of direct observations of earnings presentations and 21 interviews with analysts, managers and other relevant actors.

The findings show that analysts struggle with role conflicts because they need to satisfy the contrasting demands of managers, fund managers and colleagues. Performing the role of an expert critic mainly depends on the approval of managers; yet, analysts also find themselves in situations where they must confront the managers. To counter role conflicts and sustain their role performance, analysts also produce displays of role distance and carefully prepare to meet their audiences’ expectations. To maintain the role of the expert critic, analysts depend on both those taking their advice (fund managers) and those being reviewed (managers).

This study is one of few empirically rich investigations of analysts’ activities, interactions with managers and meetings with multiple audiences. It also contributes to previous interview studies using dramaturgical analysis by offering in-depth observations of a single, distinct situated activity system.