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Proof that in an efficient market, event studies can provide no systematic guidance for revision of accounting standards and disclosure policy for the purpose of maximizing shareholder wealth

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  • SHYAM SUNDER

Abstract

. A systematic revision of accounting standards and disclosure policy on the basis of evidence obtained from event studies conducted in an efficient stock market is shown to be an ineffective means of maximizing shareholder wealth. Résumé. Une réision systématique des normes de comptabilité et des conventions relatives à la présentation de l'information à partir de l'information recueillie à la suite d'études d'événements menées dans un marché boursier efficient se révèle inefficace lorsqu'il s'agit de maximiser la richesse des actionnaires.

Suggested Citation

  • Shyam Sunder, 1989. "Proof that in an efficient market, event studies can provide no systematic guidance for revision of accounting standards and disclosure policy for the purpose of maximizing shareholder wealth," Contemporary Accounting Research, John Wiley & Sons, vol. 5(2), pages 452-460, March.
    • Handle: RePEc:wly:coacre:v:5:y:1989:i:2:p:452-460
    DOI: 10.1111/j.1911-3846.1989.tb00714.x
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    References listed on IDEAS

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    1. Kanodia, Chandra, 1980. "Effects of Shareholder Information on Corporate Decisions and Capital Market Equilibrium," Econometrica, Econometric Society, vol. 48(4), pages 923-953, May.
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    Cited by:

    1. KATHLEEN T. McGAHRAN, 1989. "Discussion of “Proof that in an efficient market, event studies can provide no systematic guidance for revision of accounting standards and disclosure policy for the purpose of maximizing shareholder wealthâ€," Contemporary Accounting Research, John Wiley & Sons, vol. 5(2), pages 468-471, March.
    2. Philip Bond & Itay Goldstein & Edward Simpson Prescott, 2006. "Market-based regulation and the informational content of prices," Working Paper 06-12, Federal Reserve Bank of Richmond.
    3. Ronald A. Dye & S. Sridhar, 2002. "Resource Allocation Effects of Price Reactions to Disclosures," Contemporary Accounting Research, John Wiley & Sons, vol. 19(3), pages 385-410, September.
    4. Nicholas Dopuch, 1989. "Discussion of “Proof that in an efficient market, event studies can provide no systematic guidance for revision of accounting standards and disclosure policy for the purpose of maximizing shareholder wealthâ€," Contemporary Accounting Research, John Wiley & Sons, vol. 5(2), pages 461-467, March.
    5. Pingyang Gao & Pierre Jinghong Liang, 2013. "Informational Feedback, Adverse Selection, and Optimal Disclosure Policy," Journal of Accounting Research, John Wiley & Sons, Ltd., vol. 51(5), pages 1133-1158, December.
    6. Gao, Pingyang, 2008. "Disclosure Quality, Cost of Capital, and Investors’ Welfare," MPRA Paper 9478, University Library of Munich, Germany, revised Jun 2008.

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