caa a22 4500 463187652 CHVBK 20180406164858.0 cr unu---uuuuu 170326e20070501xx s 000 0 eng 10.1007/s11156-007-0016-0 doi (NATIONALLICENCE)springer-10.1007/s11156-007-0016-0 The valuation consequences of voluntary accounting changes [Elektronische Daten] [James Linck, Thomas Lopez, Lynn Rees] Firm management typically claims that voluntary accounting method changes (VACs) are made to enhance the informativeness of earnings by better matching accounting practices with economic reality. In contrast, skeptics argue that managers adopt new accounting procedures to opportunistically manage earnings and influence their firm's stock price. In this paper, we investigate these alternative motives for VACs. Specifically, we investigate whether VACs cause equity prices to deviate from their fundamental values in the short-term by studying the long-run stock-price performance for a sample of firms that voluntarily change accounting methods. In addition, we investigate changes in earnings informativeness by examining the behavior of earning response coefficients and the relationship between earnings and future cash flows in years surrounding the VAC event. In contrast to prior research, we find little evidence that a strategy based solely on the earnings effect of a VAC can generate abnormal returns. While we find weak evidence of post-VAC abnormal returns for extreme VACs, this result appears to be driven by the accruals anomaly documented in Sloan [Sloan, R. G. (1996). The Accounting Review, 71, 289-315]. Our evidence further suggests that earnings informativeness is not significantly altered by voluntary changes in accounting methods. Taken together, our evidence suggests the market recognizes the financial statement effects of alternative acceptable accounting methods and efficiently processes the valuation implications of VACs. Springer Science+Business Media, LLC, 2007 Accounting changes nationallicence Accruals anomaly nationallicence Market efficiency nationallicence Earnings management nationallicence Earnings fixation nationallicence Earnings informativeness nationallicence Earnings quality nationallicence Linck James Department of Banking and Finance, Terry College of Business, University of Georgia, 30602-6253, Athens, GA, USA aut Lopez Thomas School of Accounting, Moore School of Business, University of South Carolina, 29208, Columbia, SC, USA aut Rees Lynn Department of Accountancy & Taxation, Bauer College of Business, University of Houston, 77204-6021, Houston, TX, USA aut Review of Quantitative Finance and Accounting Kluwer Academic Publishers-Plenum Publishers; http://www.springer-ny.com 28/4(2007-05-01), 327-352 0924-865X 28:4<327 2007 28 11156 https://doi.org/10.1007/s11156-007-0016-0 text/html Onlinezugriff via DOI 1 research-article jats NATIONALLICENCE 856 40 https://doi.org/10.1007/s11156-007-0016-0 text/html Onlinezugriff via DOI NATIONALLICENCE 700 1- Linck James Department of Banking and Finance, Terry College of Business, University of Georgia, 30602-6253, Athens, GA, USA aut NATIONALLICENCE 700 1- Lopez Thomas School of Accounting, Moore School of Business, University of South Carolina, 29208, Columbia, SC, USA aut NATIONALLICENCE 700 1- Rees Lynn Department of Accountancy & Taxation, Bauer College of Business, University of Houston, 77204-6021, Houston, TX, USA aut NATIONALLICENCE 773 0- Review of Quantitative Finance and Accounting Kluwer Academic Publishers-Plenum Publishers; http://www.springer-ny.com 28/4(2007-05-01), 327-352 0924-865X 28:4<327 2007 28 11156 Metadata rights reserved Springer special CC-BY-NC licence nationallicence BK010053 XK010053 XK010000 NATIONALLICENCE NATIONALLICENCE NL-springer