Is the Decline in the Information Content of Earnings Following Restatements Short-Lived?

• Main Authors: CHEN, Xia, CHENG, Qiang, LO, Alvis K.
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2014
• Subjects: accounting restatements; information content of earnings; accounting irregularities; Accounting; Corporate Finance
• Online Access: https://ink.library.smu.edu.sg/soa_research/1078; https://ink.library.smu.edu.sg/context/soa_research/article/2077/viewcontent/SSRN_id2253689.pdf
• Institution: Singapore Management University

Prior research finds that the decline in the information content of earnings after restatement announcements is short-lived and the earnings response coefficient (ERC) bounces back after three quarters. We re-examine this issue using a more recent and comprehensive sample of restatements. We find th...