Transparency in earnings calls does not guarantee equal access to information
The specialized language used by analysts and management in listed companies' Q&A sessions can be challenging for individual investors to follow. However, Kaisa Penttinen's doctoral dissertation in accounting at the University of Vaasa, Finland, shows these sessions still deliver useful information beyond what is disclosed in written reports alone.
Transparency in earnings call question-and-answer sessions does not guarantee equal access to information for all investors, according to a doctoral dissertation by Kaisa Penttinen from the University of Vaasa in Finland. While these sessions offer a more flexible platform for communication than written reports, which are bound by legal requirements, they can still present challenges for individual investors.
The specialized language and references to private meetings used by analysts and company executives can make the discussion difficult to follow. Additionally, company executives may respond to questions in a way that avoids short-term concerns or seeks to evade accountability. Despite these obstacles, earnings calls provide valuable information that complements formal reports, as they allow for more spontaneous and in-depth exchanges between investors and company representatives.
The study, based on discourse analysis of transcripts from seven Nasdaq Helsinki-listed companies, highlights the ongoing debate surrounding transparency and reliable communication in financial markets.
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