The Accounting Review Vol. 51 No. 3 1976
Accounting Reports, Policy Interventions and the Behavior of Securities Returns.
Abstract
The impact of changes in reporting requirements for companies has long been a topic of interest for accountants and others involved in the evaluation of investment alternatives. Many recent papers have discussed the effect of different methods of determining earnings on the behavior of securities prices. For example, W.H. Beaver and R.E. Dukes have made inferences concerning the alternative accounting earnings model which the market appears to use for determining securities prices. Several authors have indicated that the market is not fooled in setting security prices when alternative accounting techniques are used. In each of these papers, the market was assumed to be able to adjust from one reporting method to another, thus, the market had both reported earnings and earnings under alternative reporting methods available to it for setting securities prices. There have been a few studies designed to assess the impact of changes in reporting requirements for a large number of companies, particularly when investors are unable to adjust from the prior method to the reporting method required under rules developed by some regulatory body. Such sweeping decisions that would be significant enough to impact on the behavior of securities prices in a manner that could be detected by statistical methods are rare.
- DOI
- 10.2308/tar-4482183
- Volume
- 51
- Issue
- 3
- Pages
- 590-603
- Language
- en
- Sources
- openalex crossref