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- The real effects perspective thus suggests that a firm’s financial reporting not only has a capital market effect that results from the investors’ and creditors’ responses, but also feeds back into the reporting firm’s real activities (i.e., its investments and/or operations).
www.sciencedirect.com/science/article/pii/S1061951823000733
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Mar 1, 2024 · Most accounting research focuses on the capital market effects of financial reporting. Financial reporting informs investors, creditors, and the public about firms’ activities, net assets, financial position, and results of operations. It thus decreases information frictions when firms need to fund (new) projects and activities.
Apr 8, 2023 · This article systematically reviews 94 accounting and finance studies that address the real effects of financial reporting. Whereas the effects of financial reporting on capital suppliers...
Jun 26, 2020 · In this paper, I provide an overview of the research on the real effects of financial reporting on financing and investing decisions made by firms. I start by describing the finance theory on how firms make investment decisions and how accounting improves investment efficiency.
- Catherine Shakespeare
- 2020
Nov 1, 2019 · First, financial reporting can improve investment decisions by reducing information asymmetry between managers and investors, as well as among investors, which can affect adverse selection costs and consequently the cost of raising external capital.
- Sugata Roychowdhury, Nemit Shroff, Rodrigo S. Verdi
- 2019
Overall, the results from this study suggest that <IR> does matter to the capital market in that it helps improve the information environment of reporting companies, evidenced by improved analyst forecast accuracy.
- Shan Zhou, Roger Simnett, Wendy Green
- 2017
Apr 15, 2024 · Consistent with the rationale that financial reporting alleviates asymmetric information, reduced-reporting firms are targeted later in merger waves relative to their industry peers and subject to a permanent stock price revaluation when M&A deals fail.
Jun 26, 2020 · It is highly pertinent for the health of the wider economy to understand how financial reporting regulation affects the management of those companies and to aim to improve the ability of investors and management to make an informed choice and then to monitor that investment with confidence.
