Journal article
Corporate Investments: Learning from Restatements
Journal of accounting research, Vol.47(3), pp.679-720
06/2009
DOI: 10.1111/j.1475-679X.2009.00332.x
Abstract
This study analyzes the information conveyed by the restatements of financial reports. We argue that restatements contain news about the investment projects of the restating firms' competitors. This news causes competitors to revise their beliefs about the projects' value, and to modify their subsequent investment decisions. Accordingly, we hypothesize that changes in competitors' investments after restatement announcements are related to news in the restatements. Consistent with our prediction, we find that changes in competitors' investments following restatement announcements are significantly related to various proxies for news in the restatements, such as competitors' and restating firms' abnormal returns at the restatement announcements. We conclude that restatements convey information about the investment projects of restating firms' competitors.
Details
- Title: Subtitle
- Corporate Investments: Learning from Restatements
- Creators
- Art Durnev - McGill UniversityClaudine Mangen - Concordia Univ, Montreal, PQ, Canada
- Resource Type
- Journal article
- Publication Details
- Journal of accounting research, Vol.47(3), pp.679-720
- DOI
- 10.1111/j.1475-679X.2009.00332.x
- ISSN
- 0021-8456
- eISSN
- 1475-679X
- Publisher
- Wiley
- Number of pages
- 42
- Language
- English
- Date published
- 06/2009
- Academic Unit
- Finance
- Record Identifier
- 9984380379302771
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