The information content of annual reports: a price and trading response analysis

Article Abstract:

Stock market reaction to the date of the issuance of annual reports was researched. Information beyond preliminary price earnings data is contained in annual reports, and prior research typically has focused on the information content of the annual reports. Valuable insight is gained by expanding research to incorporate price and trading measures. Trading measures include transaction size, mean transaction size, and size-stratified transactions. Research results indicate that there is no price response, and the results offer little support for a volume of shares response. The number of transactions does increase significantly at the time of the date of the release of annual reports, indicating that investors find annual reports informative and that annual reports display a social welfare value.

Research, Analysis, Stock-exchange, Stock exchanges, Investors, Corporation reports, Company reports

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Understanding accounting changes in an efficient market - a comment, replication, and re-interpretation

Article Abstract:

A replication and correction is presented of 1978 research by Abdel-khalik and McKeown on security market response to discretionary accounting changes: a change to last in, first out (LIFO). The paper studied contains an experimental design flaw. After the design is adjusted, some of the conclusions contained in the original paper require revision. The corrected results do not alter the finding that security market response to LIFO adoption is conditional on earnings.

Earnings per share

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Equity accounting for reciprocal stockholdings

Article Abstract:

Equity accounting is a way of accounting for investments made in non-subsidiary associated firms. The challenge of equity accounting for reciprocal holdings in stock is discussed. Some of the options are discussed, based on actual practices in New Zealand. Treatments are categorized and assessed based on two broad, underlying equity accounting theories.

New Zealand, Reciprocals

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