Restatements: Investor Response and Firm Reporting Choices

37 Pages Posted: 31 Jul 2008 Last revised: 14 May 2014

See all articles by Marlene Plumlee

Marlene Plumlee

University of Utah - School of Accounting

Teri Lombardi Yohn

Emory University Goizueta Business School

Date Written: July 29, 2008

Abstract

This paper examines accounting restatements from two perspectives. First, we examine the market reaction to restatement filings, using both returns and volume measures. We document that the earnings impact and whether a firm discloses the restatement through an 8K filing provides the most consistent explanatory power in our models. Second, we explore whether attributes of the restatement or of the firm are associated with whether a firm files and 8K or not. Our findings suggest that firms are strategic in their decision to employ an 8K; however it is unclear that the decision to file or not file an 8K is related to an attempt by firms to diminish investors' awareness of the restatement.

Keywords: Restatement, Market Reaction, SEC, 8K

JEL Classification: G12, M41, M43, K22, G38

Suggested Citation

Plumlee, Marlene A. and Yohn, Teri Lombardi, Restatements: Investor Response and Firm Reporting Choices (July 29, 2008). Available at SSRN: https://ssrn.com/abstract=1186254 or http://dx.doi.org/10.2139/ssrn.1186254

Marlene A. Plumlee (Contact Author)

University of Utah - School of Accounting ( email )

1645 E Campus Center Dr
Salt Lake City, UT 84112-9303
United States

Teri Lombardi Yohn

Emory University Goizueta Business School ( email )

201 Dowman Drive
Atlanta, GA 30322
United States

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