決策有用的信息觀

Topic5TheInformationApproachtoDecisionUsefulnessTopic5TheInformationApproachtoDecisionUsefulness1.Overview2.OutlineoftheResearchProblem3.FinancialinformationandMarketResponse4.TheBallandBrownStudy5.EarningsResponseCoefficients(ERC)6.ACaveatAboutthe“Best”AccountingPolicy7.TheInformationContentofOtherFinancialStatementInformation8.Conclusions19-Jan-2321.Overview霍桑實(shí)驗(yàn)——車間照明實(shí)驗(yàn)實(shí)驗(yàn)?zāi)康模号逭彰鲝?qiáng)度（自變量）對(duì)生產(chǎn)效率（因變量）所產(chǎn)生的影響。實(shí)驗(yàn)程序：實(shí)驗(yàn)是在被挑選的兩組繞線工人中進(jìn)行的，一組是實(shí)驗(yàn)組，一組是控制組；在實(shí)驗(yàn)過程中，實(shí)驗(yàn)組不斷增加照明強(qiáng)度，而控制組照明強(qiáng)度始終保持不變。實(shí)驗(yàn)結(jié)果：兩組的產(chǎn)量均大大增加（前測(cè)和后測(cè)）了，但增加量幾乎相等；無法確定改善照明對(duì)生產(chǎn)效率有什么積極影響。Despitethedifficultiesofdesigningexperimentstotesttheimplicationsofdecisionusefulness,accountingresearchhasestablishedthatsecuritymarketpricesdorespondtoaccountinginformation,thatisanexaminationofempiricalresearchinaccounting.19-Jan-2331.OverviewIftheefficientmarketstheoryandthedecisiontheoriesunderlyingitarereasonabledescriptionstorealityonaverage,weshouldobservethemarketvaluesofsecuritiesrespondinginpredictablewaystonewinformation.Thedegreeofusefulnessforinvestorscanbemeasuredbytheextentofvolumeorpricechangefollowingreleaseoftheinformation.Theequatingofusefulnesstoinformationcontentiscalledtheinformationapproachtodecisionusefulnessoffinancialreporting,sinceBall&Brown(1968).19-Jan-2341.OverviewHowever,whataccountantscannotdoisclaimthatthebestaccountingpolicyistheonethatproducesthegreatestmarketresponse.Whynot?Theinformationapproachtodecisionusefulnessisanapproachtofinancialreportingthatrecognizesindividualsresponsibilityforpredictingfuturefirmperformanceandthatconcentratesonprovidingusefulinformationforthispurpose.Theapproachassumessecuritiesmarketefficiency,recognizingthatthemarketwillreacttousefulinformationfromanysource,includingfinancialstatements.19-Jan-2352.OutlineoftheResearchProblem2.1ReasonsforMarketResponse2.2FindingtheMarketResponse2.3SeparatingMarket-WideandFirm-SpecificFactors2.4ComparingReturnsandIncome19-Jan-2362.1ReasonsforMarketResponseConsiderthefollowingpredictionsaboutinvestorbehavior,inresponsetofinancialinformation:Investorshavepriorbeliefsaboutafirm’sfutureperformance,thatis,…….,whichaffecttheexpectedreturnandriskofafirm’sshares.Uponreleaseofcurrentyear’snetincome,certaininvestorswilldecidetobecomemoreinformed,byanalyzingtheincomenumber.Formostofthischapterwewillconfinefinancialstatementinformationtoreportednetincome.Why?Isthereanyotherchoice?19-Jan-2372.1ReasonsforMarketResponseConsiderthefollowingpredictionsaboutinvestorbehavior,inresponsetofinancialinformation:Investorswhohaverevisedtheirbeliefsaboutfuturefirmperformanceupwardwillbeinclinedtobuythefirm’ssharesattheircurrentmarketprice,andviceversa.Wewouldexpecttoobservethevolumeofsharestradedtoincreasewhenthefirmreportsitsnetincome(Beaver,1968).Iftheinvestorswhointerpretreportednetincomeasgoodnewsoutweighthosewhointerpretitasbadnew,wewouldexpecttoobserveanincreaseinthemarketpriceofthefirm’sshares,andviceversa.19-Jan-2382.2FindingtheMarketResponseWhencurrentyear’sreportednetincomefirstbecamepubliclyknown?Usingthedateof

thefirm’snetincomewasreportedinthefinancialmediasuchasTheWallStreetJournal,andinvestigatingthereactionsinanarrowwindowofafewdayssurroundingthisdate.Separatinggoodorbadnews:Thegoodorbadnewsinreportednetincomeisusuallyevaluatedrelativetowhatinvestorsexpected.Thismeansthatresearchersmustobtainaproxyforwhatinvestorsexpectednetincometobe.SeparatingMarket-wideandfirm-specificfactorsonsharereturns:Therearealwaysmanyeventstakingplacethataffectafirm’ssharevolumeandprice.Thus,itisdesirabletoseparatetheimpactsofmarket-wideandfirm-specificfactorsonsharereturns.19-Jan-2392.3SeparatingMarket-Wide

andFirm-SpecificFactorTheMarketmodeliswidelyusedtoexpostseparatedmarket-wideandfirm-specificfactorsthataffectsecurityreturns.已實(shí)現(xiàn)收益等于期初預(yù)期收益αj+βjRMt加上未期望或異常收益εjt。其中：αj=(1－βj)Rf，E(εjt)=0，εjt≠0Thisabnormalreturn(εjt)isalsointerpretedastherateofreturnonfirmj’ssharesfortimepointtafterremovingtheinfluenceofmarket-widefactors.19-Jan-2310SeparatingMarketWideandFirmSpecificfactorsIfincomeannouncementisgoodnewsthenwehaveapositiveabnormalsharereturn01-Jan-23122.3SeparatingMarket-Wide

andFirm-SpecificFactorFigure5.2:Actualreturn(0.0015)onfirmj’ssharesforday0(thedayofthefirm’’scurrentearningsannouncement)isseparatedintoexpectedreturn(0.0009)andabnormalreturn(0.0006).How?ObtainthepastRjtandRMt(proxied,forexample,bytheDowJonesIndustrialAverageindexortheS&P/TSXCompositeindex),anduseregressionanalysistoestimatethecoefficients(αjandβj)ofthemodel.So,wecanpredictthereturnonfirmj’’sshareswithαj,βjandRM0RM0=(Levelofindex,endday0+Dividendsindex,day0)/(Levelofindex,beginningday0)－1，Sometimes,thedividendsareomitted.Unusual,Non-recurringandExtraordinaryItemsTheextraordinaryitemsmustbefullydisclosed;otherwise,themarketmaygetanexaggeratedimpressionofearningspersistence.Thelastcharacteristicinthedefinitionwasassedinthe1989revision.Extraordinaryitemsareitemsthatresultfromtransactionsoreventsthathaveallofthefollowingcharacteristics:(a)theyarenotexpectedtooccurfrequentlyoverseveralyears;(b)theydonottypifythenormalbusinessactivitiesoftheentity;and(c)theydonotdependprimarilyondecisionordeterminationsbymanagementorowners.01-Jan-23141989revisionThisrevisionwasdesignedtoresolvetheissueofclassificatorysmoothing,wherebymanagementcouldsmooth(orotherwisemanageearningsfromcontinuingoperationsbychoosingtoclassifyunusualitemsaboveorbelowtheoperatingearningsline(Barnea,Ronen&Sadan,1976).However,thenatureoftheimprovementcanbequestioned……Tworelatedproblemsarisingfromthisrevision:First,ifunusualandnon-recurringitemsarenotfullydisclosed,investorsmayoverestimatethepersistenceofoperatingincome;Second,andofgreaterconcern,theamountsandtimingoftherecordingofunusualandnon-recurringitemsaresubjecttostrategicmanipulationbymanagement.Elliott&Hanna(1996)foundasignificantdeclineinthecoreearningsERCinquartersfollowingthereportingofalargeunusualitem.Furthermore,theERCdeclinedfurtherifthefirmreportednumerouslargespecialitemsovertime.Why?01-Jan-231501-Jan-2316Unusual,Non-Recurring

andExtraordinaryItemsHierarchyofincomenumbersNetincomebeforeunusualandnon-recurringitems,alsocalledcoreearningsxxUnusualandnon-recurringitemsxxIncomefromcontinuingoperations,alsocalledoperatingincomexxIncomefromDiscontinuingoperationsxxNetincomexx01-Jan-231701-Jan-2318OtherComprehensiveIncomePresentedwithIncomeStatementNetincomefromoperationsxxxExtraordinaryitemsxxxNetincomexxxOthercomprehensiveincomexxxComprehensiveincomexxxAlternativePresentationAspartofstatementofchangesinshareholders’equityLesstransparent,especiallyifsecuritiesmarketsnotfullyefficient19202.4ComparingReturnsandIncomeresearchercannowcomparetheabnormalsharereturn(marketprices)onday0ascalculatedabovewiththeunexpectedcomponentoffirm’’scurrentreportednetincome(accountinginformation).Ifthisunexpectednetincomeisgoodnews(thatis,apositiveone),givensecuritiesmarketefficiency,apositiveabnormalsharereturnconstitutesevidencethatinvestorsonaveragearereactingfavorablytotheexpectedgoodnewsinearnings.Toincreasethepoweroftheinvestigation,theresearchermaywishtosimilarlycompareafewdaysoneithersideofday0.2.4ComparingReturnsandIncomeIfpositiveandnegativeabnormalreturnssurroundinggoodorbadnewsarefoundtoholdacrossasampleoffirms,theresearchermayconcludethatpredictionsbasedonthedecisiontheoryandefficientsecuritiesmarkettheoryaresupported(thatis,accountinginformationisuseful).一種復(fù)雜情情況是在公公司公告盈盈余時(shí)，公司其他特特定信息也隨之而至至……簡(jiǎn)單地把這這類公司從從樣本中剔剔除出去；；另一種復(fù)雜雜情況為了了區(qū)分市場(chǎng)場(chǎng)回報(bào)和公公司特定回回報(bào)，對(duì)公公司β的估計(jì)……用盈余公告告后一段期期間的數(shù)據(jù)據(jù)估計(jì)β，用其他方方法估計(jì)β和公司特定定回報(bào)，不不區(qū)分市場(chǎng)場(chǎng)回報(bào)和公公司特定回回報(bào)（Easton&Harris,1991）。并不能保證證市場(chǎng)模型型充分描述述產(chǎn)生股票票收益的實(shí)實(shí)際過程……Brown&Warner(1980)得出結(jié)論：：對(duì)于月回回報(bào)窗口，，市場(chǎng)模型型比其他可可選方法表表現(xiàn)得更合合理。01-Jan-2323CurrentFinancialStatementEvidenceGNBNStateHigh0.800.20Low0.100.90（副對(duì)角線線概率）削削弱當(dāng)期財(cái)財(cái)務(wù)報(bào)表信信息和未來來公司業(yè)績(jī)績(jī)之間的關(guān)關(guān)系，稱為為財(cái)務(wù)報(bào)表表中的噪音音（noise）或低盈余余質(zhì)量（lowearningsquality）。主對(duì)角角線概率越越高，系統(tǒng)統(tǒng)越有信息息含量（informative），稱為透透明（transparent）或高質(zhì)量量（highquality）信息系統(tǒng)的的信息含量量能夠被實(shí)實(shí)證檢驗(yàn)3.FinancialinformationandMarketResponsePermanent:expectedtolastindefinitelyTransitory:affectingearringsinthecurrentyearonlyPriceIrrelevant:zeropersistencyTypesofEarningEvents01-Jan-232401-Jan-2325EventStudyItstudiesthesecuritiesmarketreactiontoaspecificevent.事件研研究是是目前前檢驗(yàn)驗(yàn)半強(qiáng)強(qiáng)式有有效市市場(chǎng)假假說的的主要要方法法，用用來了了解資資本市市場(chǎng)證證券價(jià)價(jià)格與與特定定事件件之間間相關(guān)關(guān)性的的實(shí)證證研究究若此事事件有有影響響，證證券價(jià)價(jià)格波波動(dòng)狀狀況異異于無無此事事件時(shí)時(shí)的表表現(xiàn)，，產(chǎn)生生異常?；貓?bào)報(bào)應(yīng)用統(tǒng)統(tǒng)計(jì)方方法檢檢驗(yàn)異異?；鼗貓?bào)狀狀況，，以說說明此此事件件是否否對(duì)證證券價(jià)價(jià)格有有影響響常用事件:公司盈余公公告、新股股發(fā)行、增增發(fā)和配股股、股票回回購(gòu)或分割割、股利分分配、兼并并收購(gòu)、盈盈利預(yù)測(cè)，，以及宏觀觀經(jīng)濟(jì)政策策變化公告告等Ball&Brown(BB,1968)study課后自學(xué)，，下次課提提問自行設(shè)計(jì)一一個(gè)與BB研究類似研研究構(gòu)想想01-Jan-2326事件及窗口估計(jì)期窗口事件期窗口樣本（分組并歸納樣本特征）估計(jì)正常和異常收益統(tǒng)計(jì)檢驗(yàn)窗口長(zhǎng)短選選擇沒有固固定標(biāo)準(zhǔn)，，但數(shù)據(jù)的的可得性會(huì)會(huì)制約窗口口長(zhǎng)短選擇擇。短窗口口從幾分鐘鐘到幾天，，長(zhǎng)窗口可可能涉及幾幾個(gè)月到幾幾年短窗口容易易避免事件件窗內(nèi)其他他事件對(duì)證證券價(jià)格的的影響，但但短窗口可可能錯(cuò)誤估估計(jì)事件窗窗內(nèi)預(yù)期收收益率，而而且有些事事件的滯后后影響可能能是短窗口口所不能捕捕獲的。因因此，近年年來長(zhǎng)窗口口比較流行行，但長(zhǎng)窗窗口也存在在著諸如遺遺漏風(fēng)險(xiǎn)因因素并錯(cuò)誤誤計(jì)量風(fēng)險(xiǎn)險(xiǎn)、幸存者者偏差和數(shù)數(shù)據(jù)挖掘偏偏差等數(shù)據(jù)據(jù)問題及統(tǒng)統(tǒng)計(jì)推斷問問題正常收益，，假設(shè)不發(fā)發(fā)生此事件件的預(yù)期收收益，常用用計(jì)算模型型：市場(chǎng)模模型、均值值調(diào)整模型型、市場(chǎng)調(diào)調(diào)整模型異常收益，事事件期間內(nèi)證證券實(shí)際收益益與同期正常常收益的差01-Jan-2327事件件研研究究法法是是指指運(yùn)運(yùn)用用股股票票收收益益率率數(shù)數(shù)據(jù)據(jù)來來測(cè)測(cè)定定某某一一特特定定經(jīng)經(jīng)濟(jì)濟(jì)事事件件對(duì)對(duì)公公司司價(jià)價(jià)值值的的影影響響。。事事件件研研究究法法先先利利用用估估計(jì)計(jì)期期,估計(jì)計(jì)出出事事件件日日的的期期望望收收益益,由事事件件期期的的實(shí)實(shí)際際收收益益扣扣除除期期望望收收益益得得到到非非正正常常收收益益,再檢檢驗(yàn)驗(yàn)樣樣本本平平均均非非正正常常收收益益是是否否顯顯著著區(qū)區(qū)別別于于原原假假設(shè)設(shè)。。事事件件日日的的期期望望收收益益可可以以由由均均值值調(diào)調(diào)整整模模型型、、市市場(chǎng)場(chǎng)調(diào)調(diào)整整模模型型和和市市場(chǎng)場(chǎng)模模型型來來估估計(jì)計(jì)。。4.TheBallandBrownStudyBall&Brown(BB,1968)beganatraditionofempiricalmarketsresearchinaccountingthatcontinuestothisday.Theywerethefirsttoprovideconvincingscientificevidencethatfirms’’sharereturnsrespondtotheinformationcontentoffinancialstatements.4.1MethodologyandFindings4.2CausationVersusAssociation4.3OutcomesoftheBBStudy01-Jan-23284.1MethodologyandFindingsBBexaminedasampleof261NYSEfirmsovernineyearsfrom1957to1965.BBconcentratedontheinformationcontentofearnings.BB’sfirsttaskwastomeasuretheinformationcontentofearnings,thatis,goodnews(GN)andbadnews(BN)……….Thus,firmswithearningshigherthanlastyear’’swereclassifiedasGN,andviceversa.Thenexttaskwastoevaluatethemarketreturnonthesharesofthesamplefirmsnearthetimeofeachearningsannouncement.ThiswasdownaccordingtotheabnormalreturnsprocedureillustratedinFigure5.2.TheonlydifferencewasBBusedmonthlyreturns(dailyreturnswerenotavailableondatabasesin1968)BBrepeatedtheirabnormalsecuritymarketreturnscalculationforawidewindowconsistingofeachofthe11monthspriortoand6mothsfollowingthemonthofearningsrelease(month0).01-Jan-23294.1MethodologyandFindingsAveragecumulativeones01-Jan-23304.2CausationVersusAssociationIfasecuritymarketreactiontoaccountinginformationisobservedduringanarrowwindowofafewdayssurroundinganearningsannouncement,itcanbearguedthattheaccountinginformationisthecauseofthemarketreaction.Itcannotbeclaimedthatreportednetincomecausedtheabnormalreturnsduringthe11monthsleadinguptomonth0.Themostthatcanbearguedisthatnetincomeandreturnsareassociated.Wewillfindthattheassociationbetweensharereturnsandearningsincreasedasthewindowwidens(Easton,Harris&Ohlson,1992;Warfield&Wild,1992)01-Jan-23314.3OutcomesoftheBBStudyItopenedupalargenumberofadditionalusefulnessissues:Whetherthemagnitudeofunexpectedearningsisrelatedtothemagnitudeofthesecuritymarketresponse(Beaver,Clarke&Wright,1979).Since1968,accountingresearchershavestudiedsecuritiesmarketresponsetonetincomeonotherstockexchanges,inothercountries,andforquarterlyearningsreports,withsimilarresults.Theapproachhasbeenappliedtostudymarketresponsetotheinformationcontainedinnewaccountingstandards,auditorchanges,etc.Earningsresponsecoefficients(ESC)asksadifferentquestion,namely,foragivenamountofunexpectedearnings,isthesecuritymarketresponsegreaterforsomefirmsthanothers?01-Jan-23325.EarningsResponseCoefficients(ERC)5.1ReasonsforDifferentialMarketResponse5.2ImplicationsofERCResearch5.3MeasuringInvestors’EarningsExpectations5.4SummaryAnearningsresponsecoefficients(ERC)measurestheextentofasecurity’sabnormalmarketreturninresponsetotheunexpectedcomponentofreportedearningsofthefirmissuingthatsecurity.01-Jan-23335.1ReasonsforDifferentialMarketResponseBetaEmpiricalevidenceofalowerERCforhigher-betasecuritieswasfoundbyCollins&Kothari(1989),andbyEaston&Zmijewski(1989).CapitalStructureEmpiricalevidenceofalowerERCformorehighlyleveredfirmswasreportedbyDhaliwal,Lee&Fargher(1991).EarningsQualityThehigherearningsquality,thehigherwewouldexpectedtheERCtobe.Measurementofearningsquality:EarningspersistenceAccrualsqualityOtherreasons01-Jan-2334EarningsQualityDescriptionofeventActualevent01-Jan-2335What’’smeaningofwindow-dressing?EarningspersistenceWewouldexpectthattheERCwillbehigherthemorethegoodorbadnewsincurrentearningsisexpectedtopersistintothefuturefirmperformance.Kormedi&Lipe(1987)Themeasureofpersistencewastheextenttowhichearningschangesofthelasttwoyearscontinuedintothecurrentyear.Ramakrishnan&Thomas(RT,1991)Differentcomponentsofnetincomemayhavedifferentpersistence.Thisimpliesthataccountantsshouldprovidelotsofclassificationanddetailontheincomestatement.Permanent,expectedtopersistindefinitely(ERC>1)Transitory,affectingearningsinthecurrentyearbutnotfutureyears(ERC=1)Price––irrelevant,persistenceofzero(ERC=0)成功功引引進(jìn)進(jìn)新新產(chǎn)產(chǎn)品品，，處處置置產(chǎn)產(chǎn)房房和和設(shè)設(shè)備備，，資資本本化化開開辦辦費(fèi)費(fèi)，，注注銷銷研研究究費(fèi)費(fèi)………01-Jan-2336HigherearningsqualityHighpersistenceofearningsandcashflowsHighpredictiveabilityofearningsandcashflowsHighearningsresponsecoefficientLowlevelofearningsmanagementMorevoluntarilydisclosureStrongcorporategovernance01-Jan-2337Whatshouldtheusersbeawareof?Statementusersmust:Understandcurrentfinancialreportingsettingsandstandards.Differencesinaccountingmethods.Differencesinaccountingestimates.Differencesinstandardsimplementation.Recognizethatmanagementmaymanipulatethefinancialinformation.Distinguishbetweenreliablefinancialstatementinformationandpoorqualityinformation.3801-Jan-2338AccrualsqualityWewouldexpectthatahigherERCforhigheraccrualsquality.DeChow&Dichev(2002)Earningsqualitydependsprimarilyonthequalityofworkingcapitalaccruals.Totheextentcurrentperiodworkingcapitalaccrualsshowupascashflowsnetperiod,thoseaccrualsareofhighquality.Asimilarargumentappliestolastperiod’’saccruals.Evidencethatfirm’’sERCsandsharepricesrespondpositivelytoaccrualqualityasmeasuredbythisprocedureisreportedbyFrancisetal(2004,2005)andEckeretal(2006).01-Jan-23395.2ImplicationsofERCResearchImprovedunderstandingofmarketresponsesuggestswaysthataccountantscanfurtherimprovethedecisionusefulnessoffinancialstatements:Lowerinformativenessofpriceforsmallerfirmsimpliesthatexpandeddisclosureforthesesfirmswouldbeusefulforinvestors,contrarytoacommonargumentthat…………toexpanddisclosureofthenatureandmagnitudeoffinancialinstruments,includingthosethatare““off-balance-sheet””.……thedesirabilityofdisclosureofsegmentinformation,since………Also,MD&Aenablesthefirmtocommunicateitsgrowthprospect.Disclosureofthecomponentsofnetincomeisusefulforinvestors.01-Jan-23405.3MeasuringInvestors’EarningsExpectationsUndertheidealconditions,expectedearningsissimplyaccretionofdiscountonopeningfirmvalue.Whenconditionsarenotideal:Oneapproachistoprojectthetimeseriesformedbythefirm’spastreportednetincomes,thatis,tobasefutureexpectationsonpastperformance.However,dependsonearningspersistence.Ifearningsare100%persistent,expectedearningsarejustlastyear’sactualearnings,thenunexpectedearningsarethechange(Ball&Brown,1968);Ifearningsare0persistent,unexpectedearningsareequaltothelevelofcurrentyear’’searnings(BillCautions,Example3.1);Easton&Harris(1991)foundbothchangesinandlevelsofnetincomearecomponentsofthemarket’searningsexpectation.(Tobecontinued……)01-Jan-23415.3MeasuringInvestors’EarningsExpectationsUndertheidealconditions,expectedearningsissimplyaccretionofdiscountonopeningfirmvalue.Whenconditionsarenotideal:Anothersourceofearningsexpectationsisanalysts’forecasts.Sincerationalinvestorswillpresumablyusethemostaccurateforecast.Analysts’forecastsaremoreaccuratethantimeseriesforecasts(Brownetal,1987;O’Brien,1988);Thesinglemostrecentearningsforecastprovidedamoreaccurateearningspredictionthantheaverageforecastofallanalystsfollowingthefirm(O’’Brien,1988);Analysts’forecastsareoptimistically,althoughthebiasmayhencedecreasedinrecentyears(Kothari,2001).01-Jan-23425.4SummaryTheinformationcontentofnetincomecanbemeasuredbytheextentofsecuritypricechangeor,morespecifically,bythesizeofthesecurity’’sabnormalmarketreturn,aroundthetimethemarketlearnsthecurrentnetincome.Foragivenamountofunexpectednetincome,theextentofsecuritypricechangeorabnormalreturnsdependsonfactorssuchas…………Theempiricalresultsarereallyquiteremarkable.First,theyhaveovercomesubstantialstatisticalandexperimentaldesignpreambles;Second,theysupportsthetheoryofsecuritiesmarketefficiencyandthedecisiontheoriesthatunderlieit.Finally,theysupportthedecisionusefulnessapproachtofinancialreporting.01-Jan-23436.ACaveatAboutthe““Best””AccountingPolicyHowever,whataccountantscannotdoisclaimthatthebestaccountingpolicyistheonethatproducesthegreatestmarketresponse.Whynot?Thereasonisthatinformationhascharacteristicsofapublicgood.Asaresult,investorsmayperceiveaccountinginformationasusefuleventhoughfromsociety’’sstandpointthecostsofthisinformationoutweighthebenefitstoinvestors.Itisstilltruethataccountantscanbeguidedbymarketresponsetomaintainandimprovetheircompetitivepositionassupplierstothemarketplaceforinformation.Itisalsotruethatsecuritiesmarketswillworkbettertotheextentsecuritypricesprovidegoodindicationsofunderlyingrealinvestmentopportunities.However,thesesocialconsiderationsdosuggestthat,asageneralrule,accountingstandardsettingbodiesshouldbewaryofusingsecuritiesmarketresponsetoguidetheirdecisions.01-Jan-23447.TheInformationContentofOtherFinancialStatementInformationEvidenceofusefulnessismixed:Magliolo(1