Regulatory enforcement, foreignness, and language negativity: Evidence from SEC comment letters

IF 3.3 Q1 BUSINESS, FINANCE

Journal of International Accounting Auditing and Taxation Pub Date : 2023-06-01 DOI:10.1016/j.intaccaudtax.2023.100547

Kleopatra Koulikidou , Antonios Chantziaras , Emmanouil Dedoulis , Stergios Leventis

引用次数: 0

Abstract

In this paper, we demonstrate that negative language is employed as a mechanism through which regulators express their differentiated level of concern and pass on stronger messages to riskier reviewees. We investigate the language tone employed by the internationally-influential United States (US) Securities and Exchange Commission (SEC) in comment letters to foreign firms, which are considered riskier in comparison with their US domestic counterparts. We find a significantly greater level of language negativity in comment letters addressed to foreign registrants. We further show that the negativity of language is more intense when foreign firms are domiciled in strong-law countries and when they do not apply US Generally Accepted Accounting Principles (GAAP). We offer implications for regulators, managers, and market participants.

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监管执法，外国和语言消极性:来自SEC评论信的证据

在本文中，我们证明了负面语言被用作一种机制，通过这种机制，监管机构可以表达他们不同程度的担忧，并将更强烈的信息传递给风险更高的被审查者。我们调查了具有国际影响力的美国证券交易委员会（SEC）在给外国公司的评论信中使用的语言语气，与美国国内同行相比，这些公司被认为风险更大。我们发现，在给外国注册者的评论信中，语言负面程度明显更高。我们进一步表明，当外国公司位于强法国家，并且不适用美国公认会计原则（GAAP）时，语言的消极性会更加强烈。我们为监管者、管理者和市场参与者提供建议。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of International Accounting Auditing and Taxation BUSINESS, FINANCE-

CiteScore

4.50

自引率

3.80%

发文量

期刊介绍： The Journal of International Accounting, Auditing and Taxation publishes articles which deal with most areas of international accounting including auditing, taxation and management accounting. The journal''s goal is to bridge the gap between academic researchers and practitioners by publishing papers that are relevant to the development of the field of accounting. Submissions are expected to make a contribution to the accounting literature, including as appropriate the international accounting literature typically found in JIAAT and other primary US-based international accounting journals as well as in leading European accounting journals. Applied research findings, critiques of current accounting practices and the measurement of their effects on business decisions, general purpose solutions to problems through models, and essays on world affairs which affect accounting practice are all within the scope of the journal.