Meta-analysis of Company Characteristics and Information Content of Annual and Interim Earnings

Examining the corporate characteristics affecting the informational content of annual and interim earnings, while creating a context for the favorable presentation of financial information in order to improve financial reporting, can gain the confidence of current and potential shareholders, too. Accordingly, this research investigated company characteristics and information content of annual and interim earnings using a meta-analysis approach during the last 20 years. In this regard, 63 domestic and foreign articles were reviewed. To answer research questions, a meta-analysis approach was used in CMA2 software. In the present study, the information content of annual and interim earnings as the dependent variable is defined as the correlation and regression relationship between accounting earnings with different price reaction criteria such as return, price, abnormal, or accumulated return in previous studies. Also, corporate characteristics have the role of an independent variable, which should be investigated in previous studies in the form of an interactive effect in accounting profit, multiplication, and their effect on different price response criteria. The findings indicate the negative and significant effect of company characteristics such as financial leverage and loss of the company on accounting earnings information content. However, accounting earnings information content has been independent of other company characteristics such as company size, growth opportunity, profitability, and systematic risk. Regarding company size, the type of financial reporting (annual and interim) is a moderating factor, so the information content of annual earnings was independent of company size. In contrast, the effect of company size on the information content of interim earnings was negatively significant.