This paper examines the effects of Broad Tape news releases of earnings and dividend announcements on three aspects of intraday stock price behavior: mean returns, return variance, and serial correlation in consecutive price changes. The initial price reaction is evident in the first pair of price changes following the release (i.e., within a few minutes, at most). The returns earned by simple trading rules dissipate within five to ten minutes, although significant returns are detected in the overnight period and at the opening of trading on the next day. Disturbances in the variance and serial correlation persist for several hours and extend into the following trading day. As a class, dividend announcements induce much less activity than do earnings, although the response to dividend changes is comparable to the earnings announcement effect.

M. Laurentius Marais, James M. Patell, Mark A. Wolfson, The Experimental Design of Classification Models: An Application of Recursive Partitioning and Bootstrapping to Commercial Bank Loan Classifications, Journal of Accounting Research, Vol. 22, Studies on Current Econometric Issues in Accounting Research (1984), pp. 87-114

This paper presents an agency model in which one of several monitoring systems can be chosen, if the agent possesses private information about the firm's production technology, the principal may rationally prefer to delegate the choice of the monitor to the agent even though the agent's compensation will depend on the monitoring information. In general, this expansion of the contracting space allows the principal to orchestrate more efficiently the agent's effort and monitoring system choices. The model suggests that the existence of alternative accounting methods and the delegation of their selection to management may represent rational equilibrium behavior.