Effects of Non-Reliance Disclosures in Form 8-K Filings on Stock Prices

Abstract We analyze market reactions to 8,006 non-reliance disclosures filed under Item 4.02 in SEC Form 8-K filings (2004-2023). These disclosures result in cumulative abnormal returns of-2.6% to-5.4%, with revenue recognition errors triggering 114% more severe reactions than net income errors. Disclosures expressing uncertainty about the impact of identified errors face three times harsher market […] Source