Synergy between Accounting Disclosures and Forward-Looking Information in Stock Prices

• 成果类型: Article
• 署名作者: Arya, Anil; Mittendorf, Brian; Ramanan, Ram N. V.
• 署名单位: University System of Ohio; Ohio State University; State University of New York (SUNY) System; Binghamton University, SUNY
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/accr-51527
• 发表日期: 2017
• 页码: 1-17
• 关键词: voluntary disclosures; financial-markets; INVESTMENT

摘要

It is well recognized that stock prices provide relevant feedback that can guide future firm decisions. This paper develops a model to examine how accounting disclosures affect the decision-usefulness of such stock market reactions. We demonstrate that information in accounting reports can prove useful because it helps observers better interpret and isolate the decision-relevant information embedded in the ensuing stock price reaction. This leads to natural synergies between accounting reports and stock prices in directing firm strategies-the more forward-looking information that can potentially be gleaned from stock prices, the more the firm will invest in improving precision of accounting disclosures even when such disclosures pertain to unrelated current activities.