The JOBS Act and Information Uncertainty in IPO Firms

The Harvard Law School Forum on Corporate Governance and Financial Regulation 2014-08-20

Summary:

Editor's Note: The following post comes to us from Mary Barth, Professor of Accounting at Stanford University; Wayne Landsman, Professor of Accounting at the University of North Carolina; and Daniel Taylor, Assistant Professor of Accounting at the University of Pennsylvania.

In our paper, The JOBS Act and Information Uncertainty in IPO Firms, which was recently made publicly available on SSRN, we examine whether the Jumpstart Our Business Startups Act (JOBS Act) increases information uncertainty in firms with initial public offerings (IPOs). The JOBS Act, which was signed into law in April 2012, creates a new category of issuer, the Emerging Growth Company (EGC), and eases regulations for EGCs to encourage initial public offerings of their shares. Specifically, the Act includes provisions that allow firms with EGC status to reduce the scope of mandatory disclosure of financial statement and executive compensation information, to file draft registration statements confidentially with the Securities and Exchange Commission (SEC), to delay application of new or revised accounting standards, and to delay compliance with Section 404(b) of the Sarbanes-Oxley Act (SOX), which relates to auditor attestation on internal controls. We find evidence consistent with the easing of these regulations increasing information uncertainty in the IPO market.

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Link:

http://blogs.law.harvard.edu/corpgov/2014/08/20/the-jobs-act-and-information-uncertainty-in-ipo-firms/

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Blogs.law Aggregation Hub ยป The Harvard Law School Forum on Corporate Governance and Financial Regulation

Tags:

academic research empirical research securities regulation daniel taylor information environment ipos jobs act mary barth offer pricing public firms sec small firms stock mispricing wayne landsman

Authors:

R. Christopher Small, Co-editor, HLS Forum on Corporate Governance and Financial Regulation,

Date tagged:

08/20/2014, 09:10

Date published:

08/20/2014, 09:00