The indirect economic penalties in SEC investigations of underwriters
Accounting and Finance
A study examines the stock market reaction to write-off announcements. The increasing prevalence of write-offs over the last decade has lead the FASB to issue new guidelines on the accounting for write-offs, and there has been much discussion about the stock market reaction to these type of announcements. By focusing on the expected cash flow implications of the different types of write-off announcements, the study documents that the stock price reaction to write-off announcements is associated with the expected cash flow implications of the events surrounding the write-off.
Beatty, R. P., Bunsis, H., & Hand, J. R. M. (1998). The indirect economic penalties in SEC investigations of underwriters. Journal of Financial Economics, 50(2), 151–186. doi:10.1016/S0304-405X(98)00035-X