Financial Statement Comparability and Expected Stock Price Crash Risk
Subject Areas : Financial Knowledge of Securities Analysis
Zohreh Hajiha
1
(Department of Accounting, Islamic Azad University, East Tehran Branch, Tehran, Iran)
hasan Chenari Bouket
2
(Young Researchers and Elite Club, South Tehran Branch, Islamic Azad University, Tehran, Iran)
Keywords: Expected Crash Risk, Financial Statement Comparabil, Investors,
Abstract :
AbstractThis study investigated the relationship between the comparability of financial statements with the expected crash risk stock prices in firms listed on the Tehran Stock Exchange. Information needed for the study of the financial statements of 117 firms in the period 1390-1394 has been collected. To test the hypothesis of multivariate regression with panel data is used. To calculate the variable comparability of the model De-Franco et al. (2011) and to calculate the variable crash risk expected stock price model Kothari et al (2009) is used. The findings of the research hypothesis and show that there is negative relationship between the comparability of financial statements with the expected crash risk stock prices. In other words, by increasing the comparability of uncertainty, incorrect analysis, investors and fear of further fall in prices will reduce the period of the crisis.
فهرست منابع
* رهنمای رودپشتی، فریدون؛ وکیلی‌فرد، حمیدرضا؛ لک، فضل‌اله و عبدالرضا محسنی (1394). سبک حسابرس و قابلیت مقایسه‌ی صورت‌های مالی، سال هشتم، شماره‌ی 25، ص‌ص: 47-29.
* مرکز تحقیقات تخصصی حسابداری و حسابرسی (1392). کمیته‌ی تدوین سازمان حسابرسی، استانداردهای حسابداری، نشریه‌ی شماره‌ی 160، چاپ 23، تهران، انتشارات سازمان حسابرسی.
* Ali, A., Li, N., Zhang, W., 2015. Managers’ career concerns and asymmetric disclosure of bad versus good news. Working paper, University of Texas at Dallas.
* Baginski, S. P., Hassell, J. M., Kimbrough, M. D., 2002. The effect of legal environment on voluntary disclosure: Evidence from management earnings forecasts issued in US and Canadian markets. The Accounting Review 77(1), 25-50.
* Barth, M., Landsman, W., Lang, M., Williams, C., 2012. Are IFRS-based and US GAAP based accounting amounts comparable? Journal of Accounting and Economics 54(1), 68-93.
* Barth, M., Landsman, W., Lang, M., Williams, C., 2013. Effects on comparability and capital market benefits of voluntary adoption of IFRS by US firms: Insights from voluntary adoption of IFRS by non-US firms. Working paper, Stanford University.
* Blanchard, O., 2009. (Nearly) Nothing to fear but fear itself. The Economist, January 29th.
* Bleck, A., Liu, X., 2007. Market transparency and the accounting regime. Journal of Accounting Research 45(2), 229-256.
* Bradshaw, M. T., Hutton, A. P., Marcus, A. J., Tehranian, H., 2010. Opacity, crash risk and option smirk curves. Working paper, Boston College.
* Cano-Rodríguez, M., 2010. Big auditors, private firms and accounting conservatism: Spanish evidence. European Accounting Review 19(1). 131−159.
* Chen, C.-W., Collins, D. W., Kravet, T. D., Mergenthaler, R. J., 2014. Financial statement comparability and the efficiency of acquisition decisions. Working paper, University of Iowa.
* Chen, J., Hong, H., Stein, J., 2001. Forecasting Crashes: Trading Volume, Past Returns, and Conditional Skewness in Stock Prices. Journal of Financial Economics 61, 345–381.
* DeFond, M., Hu, X., Hung, M., Li, S., 2011. The impact of mandatory IFRS adoption on foreign mutual fund ownership: The role of comparability. Journal of Accounting and Economics 51(3), 240-258.
* DeFond, M., Hung, M., Li, S., Li, Y., 2013. Does mandatory IFRS adoption affect crash risk? The Accounting Review 90(1), 265-299.
* De Franco, G., Kothari, S. P., Verdi, R. S., 2011. The benefits of financial statement comparability. Journal of Accounting Research 49(4), 895-931.
* De Franco, G., Hope, O. K., Larocque, S., 2015. Analysts’ choice of peer companies. Review of Accounting Studies 20(1), 82-109.
* Duffee, G.R., 1995. Stock Returns and Volatility: A Firm-Level Analysis, Journal of Financial Economics 37, 399-420.
* Financial Accounting Standards Board, 2010. Statement of Financial Accounting Concepts No. 8. Available at: http://www.fasb.org/jsp/FASB/Page/PreCodSectionPage&cid=1176156317989.
* French, K.R., Roll, R., 1986. Stock Return Variances: The Arrival of Information and the Reaction of Traders, Journal of Financial Economics, 17: 5-26.
* Gong, G., Li, L. Y., Zhou, L., 2013. Earnings non-synchronicity and voluntary disclosure. Contemporary Accounting Research 30(4), 1560-1589.
* Hong, H, Stein, J.C., 2003. Differences of Opinion, Short-Sales Constraints and Market Crashes. Review of Financial Studies 16, 487-525.
* Horton, J., Serafeim, G., & Serafeim, I. 2013. Does mandatory IFRS adoption improve the information environment?. Contemporary Accounting Research, 30 (1), 388-423.
* Hutton, A. P., Marcus, A. J., Tehranian, H., 2009. Opaque financial reports, R2, and crash risk. Journal of Financial Economics 94(1), 67-86.
* Jin, L., Myers, S., 2006. R2 around the world: New theory and new tests. Journal of Financial Economics 79(2), 257-292.
* Kasznik, R., Lev, B., 1995. To warn or not to warn: Management disclosures in the face of an earnings surprise. The Accounting Review, 113-134.
* Khan, M. and Watts, R. L., 2009. Estimation and Empirical Properties of a Firm-Year Measure of Accounting Conservatism. Journal of Accounting and Economics, 48: 132-150.
* Kim, S., Kraft, P., Ryan, S., 2013. Financial statement comparability and credit risk. Review of Accounting Studies 18(3), 783-823.
* Kim, J.-B., Li, Y., Zhang, L., 2011a. Corporate tax avoidance and stock price crash risk: Firm-level analysis. Journal of Financial Economics 100(3), 639-662.
* Kim, J.-B., Li, Y., Zhang, L., 2011b. CFOs versus CEOs: Equity incentives and crashes. Journal of Financial Economics 101(3), 713-730.
* Kim, J.-B., Zhang, L., 2015. Accounting conservatism and stock price crash risk: Firm level evidence. Contemporary Accounting Research, forthcoming.
* Kim, J. B., Li, L., Lu, L. Y., Yu, Y., 2016. Financial statement comparability and expected crash risk. Journal of Accounting and Economics, 61(2-3), 294-312.
* Kothari, S. P., Shu, S., Wysocki, P. D., 2009. Do managers withhold bad news? Journal of Accounting Research 47(1), 241-276.
* Lang, M., Maffett, M., Owens, E., 2010. Earnings co movement and accounting comparability: The effects of mandatory IFRS adoption. Working paper, University of North Carolina at Chapel Hill.
* Lintner, J 1965. The valuation of risk assets and the selection of risky investment in stock portfolio and capital budgets, Review of Economics and statistics, 47 (1): 13-37.
* Markowitz, H.M., 1952. Portfolio Selection". First Edition New York. John Willey and Sons.
* Robin, A.J., and Zhang, H., 2015. Do Industry-Specialist Auditors Influence Stock Price Crash Risk? Auditing: A Journal of Practice & Theory, 34 (3): 47-79.
* Schipper, K., 2003. Principles-based accounting standards. Accounting Horizons 17(1), 61-72.
* Sharp,W., 1964. Capital asset pricing: A theory of market equilibrium under condition of risk, Journal of Finance,19: 425-442
* Skinner, D. J., 1997. Earnings disclosures and stockholder lawsuits. Journal of Accounting and Economics 23(3), 249-282.
* U.S. Securities and Exchange Commission, 2008. Speech by SEC Chairman: International Financial Reporting Standards: The Promise of Transparency and Comparability for the Benefit of Investors around the Globe. Available at: https://www.sec.gov/news/speech/2008/spch052808cc.htm.
* Wang, C., 2014. Accounting standards harmonization and financial statement comparability: Evidence from transnational information transfer. Journal of Accounting Research 52(4), 955-992.
* Yip, W. and Young, D., 2012. Does mandatory IFRS adoption improve information comparability? The Accounting Review 87 (5), 1767-1789
_||_