Análisis audiovisuales mediante el cruce de disciplinas
II.4 El cruce con el cómic
II.4.3 La interrupción como acontecimiento en el cómic
1968 Ball &
Brown Usefulness of accounting earnings 261firmsfromS&P’sCompustat tapes 1946-66 OLS procedures and CAR 1968 Beaver Value of earnings
information to equity investors 143 US firms earnings announcements from 1961-65 OLS procedures 1972 Kaplan &
Roll Effect of accounting changes on prices
332 US firms in 1964 &
1962-1968 OLS and CAR 1976 Patel Effects of management
earnings forecasts on share prices 336 earnings forecasts by 258 US firms from 1963- 1968 Market model to estimate abnormal returns 1989 Lev Usefulness of earnings
to equity investors Period from 1980-1988 Descriptive analysis 1990 Bernard &
Thomas Share prices reflect naïve expectations Quarterly earnings for 2626 firms from 1974-86 OLS procedures 1996 Beaver,
McAnally & Stinson
Joint determination of cross-sectional price & earnings changes
176 US bank holding firms
from 1973-1991 Simultaneous equations &OLS procedures 1999 Francis &
Empirical studies which investigated the content of accounting information in terms of its impact on share price changes originated with two seminal research papers: the first by Ball and Brown (1968) and the second by Beaver (1968). Both studies were instrumental in stimulating researchers to follow with extensive empirical information content studies. Ball and Brown (1968) examined the information content of the accounting earnings numbers and utilized the new capitalmarkettheories,mostnotablyFama’s(1965,1970)marketefficiencythat had just been developed at that time and which provided the theoretical justification for the use of share market prices as an operational test for the usefulness of accounting information. The authors used the abnormal performance index (API) or cumulative abnormal return (CAR), which is the difference between expected & actual return numbers, expressed as:
abnormal return = ARit = Rit– E(Rit) cumulative abnormal return = CARi =
ARitOLS procedures were used to test the difference from zero for the API for a sample of 261 companies during the period 1946-1966 and a test period of 1957- 1965 using S&Ps compustat database. They concluded that accounting numbers, mainly the EPS have considerable information content. However, the study examined only the sign of earnings forecasts errors while ignoring the magnitude of the errors.
The second pioneering study by Beaver (1968) investigated the information content of annual earnings announcements for a sample of 143 firms during the period 1961 through 1965. Beaver examined the price and trading volume movements of the sample’s shares around the earnings announcement dates. Using OLS procedures, Beaver concludes that there is a significant price and volume reaction around the earning announcements days, which indicate that investors do take into account the reported earnings as a variable in their investment decision-making process. The development of the capital market theories and the aforementioned
two empirical investigations paved the way for new branches of empirical research for accounting and finance researchers from all corners of the globe.
Kaplan and Roll (1972) documented the existence of accounting information content by examining the effect of two major accounting changes on the share prices; these changes were the switch flow-through method in reporting investment credit and the switch from accelerated depreciation method to straight- line method. Using the API methodology, the authors sampled 332 US firms that switched to flow-through method in 1964 and 71 firms that switched to straight- line depreciation during the period 1962-1968. The methodology was based on the abnormal return derived from the market model. The cumulative abnormal return was examined to test if it is statistically different from zero. The authors documented an increase in average share prices around the switch dates but could not find any statistical significance for their results. Manipulation of earnings by switching to different accounting methods does not have a favourable impact on security prices because investors look at the true economic position of firm. Patel (1976) examined the impact of forecasted earnings on equity valuation using different methodologies. He used the abnormal return from the market model that is derived from CAPM to examine the effect on share prices of management’s earnings forecasts. For a sample of 336 earnings forecasts released by 258 US companies, Patel found significant stock market response to management earnings forecasts around the dates of the forecasts release. The maincriticismofPatel’sworkisthefactthatheignoredtheimpactoftheforecasts accuracy.
Bernard and Thomas (1990) investigated the possibility that share prices reflect naïve expectations for a sample that includes the quarterly earnings for 2626 firms during the period 1974-1986. The authors concluded that share prices do not fully reflect naïve earnings expectation models that predict that future quarterly earnings will equal the earnings of a comparable quarter of the last period.
Beaver, McAnally, and Stinson (1996) examined a model that assumes a joint determination of cross-sectional price changes and earnings changes. Their
sample included 176 bank-holding firms with an average number of observations of 72 to 140 each year for the period 1973-1991. They concluded that the OLS coefficients of earnings and returns are larger and less biased than those obtained from a single equation.
Francis and Schipper (1999) investigated and evaluated the claim that financial statements have lost their relevance to investors. The sample consisted of all firms listed on the Center for Research in Security Prices (CRSP) and compustat databases during the period 1952-1994. The CRSP database contains daily and monthly price, volume, and return data for NYSE, ASE, and the National Association of Securities Dealers Automated Quotation system shares. The methodology employed OLS and rank regressions to test two measures of relevance: the portfolio measure, which considers market adjusted return as a dependent variable, and an earnings and cash flow measure as the independent variables. Relevance was also measured using regressions to examine the relationships between market value measures and financial information. Their results showed that tests for the ability of earnings to explain changes for returns have decreased over time while tests for the ability of book value of assets and liabilities to explain changes in market values of equity did not show evidence of a decline in the explanatory power.
There is major criticism facing most of the information content studies. For example, Lev (1989) evaluated the usefulness of earnings to equity investors and accounting research in general during the period 1980-1988. Lev provided a thorough examination of previous research to improve and stimulate further research in the area of the usefulness of financial information with regard to earnings. He concluded that earnings and returns have a weak correlation and that there is a deficiency in the development of theoretical and methodological refinements in answering the question of how and to what extent earnings are used by investors. The possibility that low quality of information exists would require a change in the direction of research in which he proposed for two areas. Firstly, there is a basic need to understand the actual use of reported data by investors and secondly, to improve financial accounting measurement and valuation procedures.