Information Content of Accounting Data and Post-Earning Announcement Drift: An Insight into Event Study of Turnaround Companies in India

Santanu K Ganguli

The IUP Journal of Accounting Research and Audit Practices, 2011, vol. X, issue 1, 7-19

Abstract: The study documents high information content and Post-Earning Announcement Drift (PEAD) phenomenon of the turnaround companies in India. Turnaround companies are defined as those which after reporting accounting loss consecutively for two or more quarters announce profit for the first time. By analyzing the data of 49 such turnaround companies, between 2004 and 2009, the study documents about 9% Cumulative Average Abnormal Return (CAAR) during the week following earning announcement. Profit reported by such companies acts as ‘earning surprise’. Short-run PEAD is observed contrary to efficient capital market theory which postulates instantaneous adjustment of price to new information. The study also attempts to provide some insight into insiders’ trading and earning management in the light of empirical findings.

Date: 2011
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:icf:icfjar:v:10:y:2011:i:1:p:7-19

Access Statistics for this article

More articles in The IUP Journal of Accounting Research and Audit Practices from IUP Publications
Bibliographic data for series maintained by G R K Murty ().