OBJECTIVE

These two weeks of 5909 will concentrate on describing and evaluating some important methods in accounting and finance. First, event study methods which measure the share price impact of information being available to investors. Secondly, the measurement of earnings management in order to detect earnings quality - for example, one of the objectives of IFRS is to minimise accounting policy choices by companies and improve their earnings quality.

LECTURES

 

Topic	Articles	Lecture notes
Event studies Lecture 11-1, LC117, Friday 18 November,	Ball & Brown, An empirical evaluation of accounting income numbers, Journal of Accounting Research, Autumn, 1968, 159 178. (The key reading) Strong, Modelling Abnormal Returns, Journal of Business Finance and Accounting, June 1992 (for greater detail).	Ball and Brown Other types of market efficiency
Earnings management Lecture 11-1, H004, Friday 25 November	Dechow, Sloan & Sweeney, Detecting earnings management, Accounting Review, April, 1995. (The key reading) Degeorge, Patel & Zeckhauser, "Earnings management to exceeds thresholds", Journal of Business, 1999, vol 72(1). (Another method of detecting earnings management)	Earnings management, pages 4 - 7 and 12 More notes on earnings management
Workshop/seminar, LC111, 2-3, 25 November	Exercise (an xlsx file) to identify the announcement date