The impact of the disclosure of extraordinary accounting items on returns to equity
Article Abstract:
This paper investigates empirically the impact on returns to equity of the disclosure of unexpected extraordinary accounting items, where unexpected extraordinary items are proxied by actual extraordinary items. The paper addresses some of the methodological limitations evident in previous studies. These limitations include the failure to identify the earliest information source, and the failure to identify the announcement month. The analysis in this study uses half-yearly reports instead of annual reports as used in previous studies, and identifies the month in which the interim results (and therefore the extraordinary items) are announced. Controls are provided for the contemporaneous announcement of operating profit and dividends, while interim reports with contemporaneously announced rights issues, bonus issues, share splits, or takeover offers, are excluded. However, one limitation which remains is the use of monthly returns. The use of daily data would provide a more sensitive test. Using cross-sectional regression analysis, no evidence was found of an association between announcements of unexpected extraordinary items and abnormal returns to equity. (Reprinted by permission of the publisher.)
Publication Name: Accounting and Finance
Subject: Business
ISSN: 0810-5391
Year: 1990
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Qualified audit reports, field dependence cognitive style, and their effects on decision making
Article Abstract:
This paper reports the findings of an experiment designed to investigate the effects of an unqualified versus and "except for" qualified audit report on subjects' share price estimates and the moderating role of cognitive style in this relationship. Using ANOVA experimental design, 34 subjects were administered identical financial information on a hypothetical company except that 17 subjects received a qualified auditors' report opinion and the other 17 received an unqualified auditors' opinion. In addition, the subjects in each group were classified as either field dependent or field independent on the basis of their scores in the Embedded Figures Test. Results showed that the "except for" audit qualification affected share price estimates and field dependence cognitive style interacted with qualified/unqualified audit opinion to also affect subject's share price estimates. (Reprinted by permission of the publisher.)
Publication Name: Accounting and Finance
Subject: Business
ISSN: 0810-5391
Year: 1990
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The impact of dividend imputation on firms' financial decisions
Article Abstract:
This paper investigates the impact of Australia's dividend imputation system on the financial decisions to be faced by an Australian resident company. It briefly outlines the dividend imputation system as enacted, and then analyzes its economic effects on companies' dividend, financing and investment decisions. (Reprinted by permission of the publisher.)
Publication Name: Accounting and Finance
Subject: Business
ISSN: 0810-5391
Year: 1990
User Contributions:
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