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An audit study was conducted in Colombia following the protocols in Giné and Mazer (2017). Trained auditors visited multiple financial institutions, seeking credit and savings products. Consistent with Gabaix and Laibson (2006) and similar to Giné and Maz

AbstractThis paper examines the relationship between liquidity and quality of financial information by analyzing long‐term trends in Amihud's (2002) illiquidity measure for firms that restate financial statements. I find that for most income decreasing restatements illiquidity increases several months before restatement announcement and remains at elevated levels one year after restatement. The result is most pronounced for firms listed on NASDAQ. Increase in illiquidity is greater upon restatements due to revenue recognition, those prompted by party other than auditor, those made by larger firms with high volatility of returns and low price levels. Income increasing restatements do not affect information asymmetry of the firm. Overall, my results indicate a positive relationship between quality of financial information and liquidity.

Financial information allows investors to condition the portfolio allocation on valuable signals on asset returns. Therefore investors have incentives to spend on information gathering. If interpreted correctly, information signals allow investors to obtain higher returns and more efficient portfolios. Since information is costly, wealthier and more risk tolerant investors have stronger incentives to invest in information. Overconfident investors who overstate the value of the information still obtain higher average returns but end up with less efficient portfolios. We study these implications using two unique surveys of customers of a leading Italian bank, with portfolio data and measures of individual investment in financial information. We find that investment in information is positively associated with returns to financial wealth and negatively associated with the portfolio Sharpe ratio. Furthermore, the latter falls with proxies of overconfidence. We relate these findings to the wealth inequality debate.

Evaluation of financial document design formed the central part of a recent research project by the Royal National Institute for the Blind (RNIB). The study, entitled The Presentation of Financial Information for Visually Impaired People, investigated financial information design in four alternative formats: large print; Braille; audio cassette; and computer disk. The results have raised some interesting implications for designers of financial documentation. Several design feature preferences were drawn from the research which are being recommended as general guidelines for financial information design. These results are outlined within a discussion of the importance of this type of research not only for visually impaired people themselves but also for financial institutions as a result of impending legal requirements under the Disability Discrimination Act (1995). Future research on this topic by the RNIB is discussed, as are some thoughts on incorporating creativity with accessible design.