Reply.

This article discusses that large fluctuations in the book-to-bill (BTB) ratio are not associated with significant average price responses. A potential explanation for the lack of reaction to some announcements is that this study uses a relatively naïve expectation model, with increases in the BTB assumed to be indicative of "good news" and decreases in the BTB assumed to be indicative of "bad news." A more powerful test would incorporate analysts' expectations of the BTB ratio; however, we have been unable to obtain such forecasts or to derive a more accurate expectation model from publicly available data. In the setting examined, the assurance provider can add value by collecting, organizing and disseminating data that firms may otherwise be unwilling to share. The model assumes that a trade association can provide the function of compiling industry-wide information. However, such models ignore the political and other problems that exist when trade association members are associated with specific firms within a given industry. The present setting suggests that models of voluntary assurance could be extended to consider particular comparative advantages that CPAs can bring to the provision and attestation of information.