Statistical studies of financial reports and stock markets

Shyam Sunder

Journal of Capital Markets Studies, 2017, vol. 1, issue 1, 5-9

Abstract: Purpose - The purpose of this paper is to examine the usefulness of statistical studies of financial reports and stock market data for improving corporate financial reports. Design/methodology/approach - Analytical writing. Findings - It is often claimed that statistical studies of co-variation between financial and stock market data can help set better financial reporting policy. Such co-variation, even when it can be estimated, tells us little about which financial reports help to make better financial decisions. A case in support of such claims remains to be made. Practical implications - The readers are advised to be extremely careful in drawing inferences from studies of co-variation between accounting and stock market data for financial reporting policy. Social implications - Inference from accounting empirical studies to policy needs better rationale to avoid bad policy consequences. Originality/value - This paper raises original questions about policy inferences from a large class of empirical research in accounting.

Keywords: Efficient markets; Financial reporting policy; Statistical co-variation; M41 (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jcmspp:jcms-10-2017-006

DOI: 10.1108/JCMS-10-2017-006

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