Do firms underreport information on cyber-attacks? Evidence from capital markets

Eli Amir, Shai Levi*, Tsafrir Livne

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


Firms should disclose information on material cyber-attacks. However, because managers have incentives to withhold negative information, and investors cannot discover most cyber-attacks independently, firms may underreport them. Using data on cyber-attacks that firms voluntarily disclosed, and those that were withheld and later discovered by sources outside the firm, we estimate the extent to which firms withhold information on cyber-attacks. We find withheld cyber-attacks are associated with a decline of approximately 3.6% in equity values in the month the attack is discovered, and disclosed attacks with a substantially lower decline of 0.7%. The evidence is consistent with managers not disclosing negative information below a certain threshold and withholding information on the more severe attacks. Using the market reactions to withheld and disclosed attacks, we estimate that managers disclose information on cyber-attacks when investors already suspect a high likelihood (40%) of an attack.

Original languageEnglish
Pages (from-to)1177-1206
Number of pages30
JournalReview of Accounting Studies
Issue number3
StatePublished - 1 Sep 2018


  • Cyber attacks
  • Data breaches
  • Disclosure


Dive into the research topics of 'Do firms underreport information on cyber-attacks? Evidence from capital markets'. Together they form a unique fingerprint.

Cite this