Materiality and Disclosure of Non-Adjusting Subsequent Events: Evidence from COVID-19

Empirical research faces challenges in assessing firms’ materiality judgements and information disclosure decisions because outsiders cannot observe undisclosed information. This thesis exploits a unique setting in China where all public firms need to consider disclosing an observable event in the notes to financial statements. The results show that the decisions are related to both the severity of the event and firms’ strategic disclosure incentives. The study also offers evidence on why firms disclose immaterial information in annual reports and the consequences of information disclosure.