A further examination of the economic consequences of SFAS no. 2

Article Abstract:

The Statement of Financial Accounting Standards No. 2 (SFAS 2) has been studied for its perceived economic repercussions. Prior research points to a decrease in research and development financing limited to over-the-counter (OTC) firms due to SFAS 2. This reaction, however, may be attributed to other economic variables such as poor macroeconomic conditions or financial stresses. Security price fluctuations were used to reevaluate the effects of the accounting change. The release of the SFAS 2 Exposure Draft were observed to affect OTC firms, as reflected in the negative returns registered at that time. However, no marked average security price reaction was established for the total market. The decline in research and developent spending for a subset of firms was thus positively related to the passage of SFAS 2.

Standards, Economic aspects, Prices and rates, Industrial research, Securities prices, Financial Accounting Standards Board, Over the counter markets, over-the-counter markets

Market efficiency bounded rationality, and supplemental business reporting disclosures

Article Abstract:

An accounting association is urging supplemental financial report disclosures regarding opportunities and risks. The authors find that these reports could affect securities prices negatively, at least partially due to individual bias.

Methods, Accounting, Business reports, Efficient market theory

The impact of securities litigation reform on the disclosure of forward-looking information by high technology firms

Article Abstract:

The authors found that voluntary disclosure increased following the passage of the Securities Litigation Reform Act of 1995, as firms had greater lawsuit risks. Forecasting errors, however, were not affected by passage of the law.

High technology industry, Cases, Accounting and auditing