Using a natural experiment (the SEC's 2016 Tick Size Pilot Program), we investigate the effects of an increase in tick size on financial reporting quality. The tick size pilot program reduces algorithmic trading (AT) and increases fundamental investors’ information acquisition and trading activities. This in turn increases the scrutiny of managers’ financial reporting choices and reduces their incentives to engage in misreporting. Using a difference‐in‐differences research design, we find a significant decrease in the magnitude of discretionary accruals, a significant reduction in the likelihood of just meeting or beating analysts’ forecasts, and a marginally significant decrease in restatements for the treated firms in the pilot program. Furthermore, we find that the change in financial reporting quality is concentrated in treated firms experiencing decreases in AT and increases in information acquisition activities. We also find that the mispricing of accruals is significantly lower for treated firms. Taken together, our results suggest that an increase in tick size has a causal effect on firms’ financial reporting quality.

中文翻译：

---

小型公司的刻度线大小和财务报告质量：来自自然实验的证据

我们使用自然实验（美国证券交易委员会（SEC）的2016年“勾号规模试点计划”），研究了勾号大小增加对财务报告质量的影响。tick价交易试点计划减少了算法交易（AT），并增加了基本投资者的信息获取和交易活动。反过来，这增加了对经理财务报告选择的审查，并降低了他们进行误报的动机。使用差异研究设计，我们发现可自由支配应计金额的显着降低，仅达到或超过分析师预期的可能性显着降低，而在美国的已处理企业的重述则略有降低。试点计划。此外，我们发现，财务报告质量的变化集中在AT减少和信息获取活动增加的经过处理的公司中。我们还发现，对处理过的公司，应计费用的错误定价明显较低。两者合计，我们的结果表明，刻度数量的增加对公司财务报告质量具有因果关系。