Cybersecurity disclosure content changes across multiple 10-K items following severe data breaches: Evidence before and after the SEC’s 2018 guidance.
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2025-07-10
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en
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This study explores how cybersecurity disclosure content has changed across multiple 10-K items—specifically, Item 1: Business; Item 1A: Risk Factors; Item 3: Legal Proceedings; Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations; and Item 8: Financial Statements and Supplementary Data—after severe data breaches, both before and after the SEC’s 2018 interpretive guidance. This study manually extracts and analyses cybersecurity disclosure content from 10-K items with inductive coding to address the limitations of the “bag-of-words” approach, and to explore deeper insights of cybersecurity disclosure content changes. Moreover, qualitative comparative textual analysis is chosen to perform three main comparisons—before and after severe data breaches, across 10-K items and pre and post the SEC’s 2018 interpretive guidance—which bring new insights into the main debate in the literature, whether cybersecurity disclosures are boilerplate or informative. This study reached several conclusions. First, cybersecurity disclosure content has shifted from cybersecurity risks and incidents to risks and future statements after the SEC’s 2018 guidance. Second, management strategically allocates cybersecurity disclosures from Item 3 to Item 8, disclosing just in one item instead of two. Third, cybersecurity disclosures increase in incident content and risks and future statements after severe data breaches. However, further exploration revealed that management slightly changes cybersecurity disclosures after severe data breaches, raising concerns about the informativeness for stakeholders.
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Faculteit der Managementwetenschappen