This paper examines the relation between the disclosure practices of firms, the number of analysts following each firm, and properties of the analysts' earnings forecasts. Using data from the Financial Analysts Federation Corporate Information Committee Report (FAF Report), we provide evidence that firms with more informative disclosure policies have a larger analyst following, more accurate analyst earnings forecasts, less dispersion among individual analyst forecasts and less volatility in forecast revisions. The results enhance our understanding of the role of analysts in capital markets. Further, they suggest that potential benefits to disclosure include increased investor following, reduced estimation risk and reduced information asymmetry, each of which have been shown to reduce a firm's cost of capital in theoretical research.

This book discusses the role of business models in corporate reporting. It illustrates the evolution of non-financial reporting, the importance of business model reporting, and the main conceptualisations of business models. It also offers a methodological contribution to the assessment of business model reporting. Finally, it discusses the main implication of business model reporting for different categories of subjects and some challenges related to this kind of disclosure. Readers will understand the role of business models in the non-financial reporting landscape. They will also gain an understanding of how business models can help users of the annual report contextualise other non-financial items disclosed. However, effective business model reporting implies paying attention to certain features that define its quality. This theme is discussed in the empirical part of the book and in the section devoted to implications for preparers, users, and regulators. As large companies in the EU and the UK have to disclose the business model in the annual report, this book will be of interest to preparers and users of financial statements, regulators involved in the ongoing non-financial regulatory process, and professional bodies. It will also be of interest to academics interested in the investigation of non-financial reporting.

We show that U.S. analysts alter their forecasting behavior in response to a randomly assigned shock that exogenously varies the timeliness and cost of accessing companies' mandatory disclosures in the cross-section of investors: analysts reduce the number of stocks they cover, issue less optimistic and more accurate forecasts that are less bold, and collectively reduce forecast dispersion. Our investigation of possible channels favors the explanation that analysts reduce the strategic component of their behavior: the changes are more pronounced among analysts with stronger incentives to strategically skew their forecasts, such as affiliated analysts and those catering to retail investors. We conclude that mandatory disclosure is a substitute for information production by analysts, whose behavior is constrained by investors' ability to verify their forecasts using corporate filings.