Do managers withhold bad news

S. P. Kothari, Susan Shu, Peter D. Wysocki

Research output: Contribution to journalArticlepeer-review

584 Scopus citations


In this study, we examine whether managers delay disclosure of bad news relative to good news. If managers accumulate and withhold bad news up to a certain threshold, but leak and immediately reveal good news to investors, then we expect the magnitude of the negative stock price reaction to bad news disclosures to be greater than the magnitude of the positive stock price reaction to good news disclosures. We present evidence consistent with this prediction. Our analysis suggests that management, on average, delays the release of bad news to investors. Copyright;

Original languageEnglish (US)
Pages (from-to)241-276
Number of pages36
JournalJournal of Accounting Research
Issue number1
StatePublished - Mar 1 2009

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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