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Researchers find quarterly reporting leads to corporate myopia

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Jan 22, 2018

On January 22, 2018, Accounting Today released an article on how mandatory quarterly reporting by public companies can lead to a short-sighted focus on near-term results, according to a new academic study.

The study, by Rahul Vashishtha and Mohan Venkatachalam of Duke University's Fuqua School of Business and Arthur G. Kraft of the Cass Business School of City University London, is set to appear in an upcoming issue of The Accounting Review, published by the American Accounting Association. The professors found that, when new regulatory mandates forced companies to increase the frequency of their financial reporting, they reduced their annual capital investments by around 1.5 to 1.9 percent of their total assets, depending on how the capital investments were defined. The average annual capital investments of those companies totaled approximately 9 percent of assets, so those reductions were hefty cuts.

Review the full article on Accounting Today's website.

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