기업에 발생한 중요사건이 경영진단의견서(MD&A)에 미치는 영향

The MD&A disclosures provide managers’ interpretation of a firms’ business that is necessary to predict the company’s future business. Due to its semi-voluntary nature, the importance of MD&A disclosures is significant. However, previous studies and data released by the Financial Supervisory Service show that firms do not provide useful information through MD&A disclosures. To better understand the usefulness of MD&A disclosures, this study adopts MD&A sentence similarity and tests whether the similarity changes when firms report material facts. In this study, we use the disclosure following Article 161 of the Capital Markets Act as a proxy for material facts. If MD&A sentences for current year differ from the previous year, sentence similarity will decrease. We find that the sentence similarity is significantly negative when firms report material facts and as the number of material facts increase, the similarity decreases, indicating that managers reflect different sentences from the previous year in MD&A. We also find that the number of sentences and words increases when material facts are reported. Furthermore, the incremental words was related to the contents of material facts. This suggests that MD&A includes significant events in a company and is a useful means of disclosure.