10.1016/S0304-405X(98)00035-X">
 

Title

The indirect economic penalties in SEC investigations of underwriters

Document Type

Article

Publication Date

1998

Department

Accounting and Finance

Abstract

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.