What Do We Learn from Two New Accounting-Based Stock Market Anomalies?

Journal of Accounting and Economics, Vol. 38, Nos. 1-3, 2004

16 Pages Posted: 20 Apr 2014

See all articles by Sudipta Basu

Sudipta Basu

Temple University - Department of Accounting

Date Written: December 1, 2004

Abstract

Hirshleifer et al. (J. Account. Econom. 38 (2004)) and Taffler, Lu and Kausar (J. Account. Econom. 38 (2004)) document large and statistically significant abnormal returns from trading on balance sheet data and audit opinions. However, the statistical tests ignore high transactions costs, especially for selling short, that would likely make the trading strategies unprofitable. The accounting anomalies literature is adding little to what we know about how and why markets operate more or less efficiently. I identify some research questions and opportunities, highlighting those with accounting and auditing implications.

Keywords: Behavioral finance; Institutional evolution; Market design; Joint hypothesis; Economic significance

JEL Classification: C43; C52; G14; G18; M40; M41

Suggested Citation

Basu, Sudipta, What Do We Learn from Two New Accounting-Based Stock Market Anomalies? (December 1, 2004). Journal of Accounting and Economics, Vol. 38, Nos. 1-3, 2004. Available at SSRN: https://ssrn.com/abstract=2426649

Sudipta Basu (Contact Author)

Temple University - Department of Accounting ( email )

Philadelphia, PA 19122
United States
215.204.0489 (Phone)
215.204.5587 (Fax)

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