Investor reaction to accounting misstatements under IFRS: Australian evidence |
| |
Authors: | John Goodwin Yigit Atilgan Serif Aziz Simsir Kamran Ahmed |
| |
Institution: | 1. School of Management, Sabancı University, Istanbul, Turkey;2. La Trobe Business School, La Trobe University, Melbourne, VIC, Australia |
| |
Abstract: | We examine the investor reaction to misstatement news for Australian listed firms from 2006 to 2013. We find 4.1 percent of firm-years have a misstatement and 79 percent of misstatements are disclosed initially only in the periodic filings (stealth misstatements). We find no investor reaction for the average misstatement, reactions of between −2.3 percent and −2.8 percent (−1.5 and −1.7 percent) for misstatements that reduce prior-period earnings or equity (affect revenue) and reactions of between −1.3 and −2.7 percent for non-stealth misstatements. Investor reactions are more negative for non-stealth misstatements that reduce prior-period earnings or equity than for stealth misstatements. |
| |
Keywords: | Misstatement news Investor reaction Stealth misstatements |
|
|