Durnev, Art and Mangen, Claudine (2011) Corporate investments: Learning from restatements. Journal Of Accounting Research, 47 (3). pp. 679-720. ISSN 1475-679X
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Official URL: https://doi.org/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.
| Divisions: | Concordia University > John Molson School of Business > Accountancy |
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| Item Type: | Article |
| Refereed: | Yes |
| Authors: | Durnev, Art and Mangen, Claudine |
| Journal or Publication: | Journal Of Accounting Research |
| Date: | 2011 |
| Funders: |
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| Digital Object Identifier (DOI): | 10.1111/j.1475-679X.2009.00332.x |
| Keywords: | restatements, spillover effects, investments, financial reports, accounting |
| ID Code: | 986871 |
| Deposited By: | Claudine Mangen |
| Deposited On: | 03 Jun 2020 16:11 |
| Last Modified: | 03 Jun 2020 16:11 |
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