The Accounting Review Vol. 56 No. 4 1981
The Impact of Accounting Regulation on the Stock Market: The Case of Oil and Gas Companies: A Comment.
Abstract
This article studies the impact of accounting regulation on the stock market in the context of oil and gas companies. The issuance of the Exposure Draft was associated with a "moderate" downward revision of security prices of oil and gas firms, especially full-costers. Moreover, that the underlying market effect is of greater consequence than his tests reveal. Since substantial uncertainty with respect to the financial-statement impact of the proposed accounting change and its adoption by the U.S. Financial Accounting Standards Board and the Securities and Exchange Commission existed during test period, results understate the importance of the accounting change to the capital market. Furthermore, doubts regarding the validity of three assumptions upon which the analysis of individual stock-return behavior depends jeopardize the interpretation of results. In the light of difficulties with regard to the validity of assumptions, it appears to be crucial to investigate the robustness of his procedure over an extensive Pre-Announcement period.
- DOI
- 10.2308/tar-4481926
- Volume
- 56
- Issue
- 4
- Pages
- 959-966
- Language
- en
- Sources
- openalex crossref