Sell-side analysts' reports and the current external reporting model

This study explores the nature of the information (financial, nonfinancial, and other) that is disseminated by quarterly recommendation reports of sell-side financial analysts. We content-analyzed nearly 7,000 elements contained in 64 analysts' quarterly recommendation reports for companies in four different industries: two intangible-asset-intensive industries and two tangible-asset-intensive industries. The results indicate that analysts' recommendation reports provide a significantly higher proportion of financial information and lower proportion of nonfinancial information for tangible-asset-intensive companies than intangible-asset-intensive companies. We also identify the number of financial and nonfinancial information elements that are traced to SEC filings. We find that a high percentage of this information, especially nonfinancial information, is not provided in these filings. This finding raises significant concerns about the completeness of the current reporting model.