Attention to corporate disclosure and earnings Management: Evidence from downloads of SEC filings

Using stakeholders' downloads of SEC filings as a proxy for their attention to corporate disclosure, we find that a higher number of downloads of a firm's filings is associated with less accrualsbased upward earnings management at the firm. This result suggests that this attention from stakeholders constrains corporate reporting bias. We also find that the negative association between downloads of SEC filings and earnings management is more pronounced when there are more stakeholders also download filings of the firm's peers or customers or its previous year's filings and when the firm's managers have greater incentives to manage earnings. In supplementary analyses, we find some evidence of substitution in earnings management methods. Specifically, a higher number of downloads of a firm's filings is associated with upward earnings management via overproduction (a form of real earnings management) and income classification shifting.