We investigate whether firms limit the volume of financial items in annual reports (including the financial statements and footnotes) to obfuscate poor future firm performance, and how investors react to this reduced volume. We estimate abnormal volume to capture managers’ discretion over reporting in the 10-K and find that abnormally low volume predicts poor future earnings. This relation is more pronounced in firms where the market has difficulty in detecting managerial intervention in the disclosure process. We also find that abnormally low volume predicts negative future returns, suggesting that managers benefit from disclosing fewer financial items by delaying the incorporation of bad news into stock prices. Further corroborating our results, we find that the volume is abnormally low when there exist strong managerial incentives to withhold bad news and manipulate investor perceptions upward. Overall, our evidence is consistent with the notion that managers attempt to obfuscate poor future performance and inflate current stock prices by disclosing fewer financial items in the 10-K.

我们调查了公司是否限制年度报告（包括财务报表和脚注）中财务项目的数量，以掩盖未来公司业绩不佳的情况，以及投资者如何应对这种减少的数量。我们估计交易量异常，以吸引管理人员对10-K报表的判断，并发现交易量异常低会预示未来收益不佳。这种关系在市场难以发现披露过程中的管理干预的公司中更为明显。我们还发现，异常低的交易量预示着未来的负收益，这表明经理们可以通过延迟将坏消息纳入股价来减少披露财务项目而受益。进一步证实了我们的结果，我们发现，如果存在强有力的管理动机来隐瞒坏消息并向上操纵投资者的看法，则交易量异常低。总体而言，我们的证据与管理者试图掩盖未来表现不佳并通过在10-K中披露较少的财务项目来夸大当前股票价格的观点相一致。