Capital market efficiency and financial reporting

Authors

R Narayanswamy, Indian Institute of Management Bangalore

Document Type

Article

Abstract

The role of accounting information in an efficient market has been a subject of study in the U.S.A. in the seventies and eighties. Systematic and rigorous research in the field has led to significant findings that have major implications for investors, managers, auditors and accounting standard setters. If these research findings can be sustained under varying conditions, the debate over financial reporting issues will change qualitatively —from issues of form of reporting accounting) to issues of substance (i.e. disclosure).

This article reviews the findings in several studies, presents them in a classified way that helps linking their relationship and examines the implications of the research for policy-making. It also cautions against attaching excessive importance to the findings given the nebulous state of the findings to date.

Recommended Citation

Narayanswamy, R (1989) "Capital market efficiency and financial reporting," IIMB Management Review: Vol. 4: Iss. 2, Article 8.
Available at: https://research.iimb.ac.in/imr/vol4/iss2/8

Publication Date

12-1-1989

First Page

55

Last Page

70