The Evaluation Overreaction of Investors Toward Going Concern (GC) & Going Concern Withdrawal (GCW) Audit Reports

Subject Areas : Management Accounting

محمدرضا رستمی ¹ , نازنین حکیمی فر ²

1 - ندارد
2 - ندارد

Received: 2012-04-08 Accepted : 2012-06-21 Published : 2012-09-10

Keywords: Behavioral Finance, Overreaction, Going concern audit reports,

Abstract :

It has been assumed that investors react to new information in the efficient market.This reaction has been demonstrated in two terms of over reacting & under reacting.The evidence shows that investors overreact or under react to new information.Investors decision making could be affected by behavioral or psychological factors,they tend to overvalue or undervalue new information. The objective of this study is"investigating market over & under reaction toward going concern (GC) audit reportson Tehran Stock Exchange (TSE)". Study population of this paper includes allcompanies which are accepted by TSE. The required information has been collectedfrom daily, weekly & monthly reports of TSE. Analyses are performed throughLevene's test in order to test the equality of variances, and then we performed Tstudenttest and Prop-test to achieve proper conclusions. In order to predictsignificance of differences between the pure revenues, we fitted the logistic regressionmodel on the difference of the mean revenues and the type of companies.Consequently, with respect to the good behavior of confidence interval's to specifysignificant differences, we proposed the best model in this situation using qualitycontrol tool's, X-bar charts to determine whether the hypothesis is correct or weshould reject the previous result. Statistical tests demonstrate the existence ofoverreaction of mart with respect to presence or absence of activity condition.