Inquiry Letters and Looking-Forward Information Disclosure: An Empirical Analysis Based on Big Data Analysis

Inquiry letters, as a representative measure of non-punitive oversight, have become an important tool for stock exchanges to fulfill their frontline supervisory roles. Based on this background, we examine the relationship between inquiry letters and forward-looking disclosure using OLS regression on A-share-listed companies. The results indicate that, following the receipt of inquiry letters, companies tend to disclose a greater number of future events in their annual report narratives, with a significant increase in the use of future tense statements. The secretary’s financial experience and military background strengthen the relationship between the two phenomena. Furthermore, this phenomenon is significant for both state-owned enterprises (SOEs) and non-state-owned enterprises (non-SOEs), although non-SOEs are more inclined to disclose a greater amount of forward-looking information compared to SOEs. The findings of this paper confirm that “futuristic” textual information in annual reports is an important tool for executives of listed companies to embellish information disclosure and stabilize the market price, and provides direct evidence of the effectiveness of the regulation of stock exchange inquiry letters.