The Securities and Exchange Commission (SEC) requires firms to disclose and discuss trends concerning their liquidity, capital resources, and operations. However, there is an ongoing debate on the value of these textual narratives. This study investigates the relation between a firm's...

Our model combines disclosure requirements and enforcement rules to analyze the impact of enforcement on firms’ reporting behavior. Starting from a voluntary disclosure model with stochastic information endowment, we add an asymmetric mandatory disclosure rule that requires firms with bad...