The conservatism principle and the asymmetric timeliness of earnings

Article Abstract:

The interpretation that conservatism as resulting in earnings indicating bad news faster than good news was investigated. This interpretation means that there are systematic differences between bad news and good news periods in the timeliness and endurance of earnings. By applying firms' stock returns as a measure of news, the contemporaneous sensitivity of earnings to negative returns was found to be two to six times that of earnings to positive returns. It was also found that negative earnings changes have lesser tendency to change than positive earnings changes.

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Loss function assumptions in rational expectations tests on financial analysts' earnings forecasts

Article Abstract:

According to prior research financial analysts do not process public information efficiently in generating their earnings forecasts. The rational expectations tests are compared using alternative loss functions. It is concluded that there is no evidence of forecast inefficiency with least absolute deviation regressions.

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What do we learn from two new accounting-based stock market anomalies?

Article Abstract:

Stock market anomalies related to going concern audit opinions and NAO are discussed. It is concluded that though accounting papers may continue to document stock market anomalies their contribution to understanding of market behavior is quite small.

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