Search engines are among the most important information technology (IT) applications and platforms on which to conduct information search. This study contributes by investigating whether and how the search engine-enabled information search is related to accounting information effectiveness. We develop the concept of information traffic to conceptualize investor IT-enabled information search activities and to explore whether the searches captured by this concept provide any insights for understanding and enhancing accounting information effectiveness. Building upon the input-process-output model (Maines and McDaniel 2000) and with a sample of 59 accounting information items, we report that information items with higher information traffic have greater ability to explain and predict firm market value (i.e., higher information effectiveness). The impact of information traffic on information effectiveness is higher for economic upturns than for economic downturns and differs among different types of information. We propose a conceptual measure that integrates both information traffic and information effectiveness to capture information relative importance and to suggest empirically an order in importance of the ten types of information we investigate. Our dynamic analysis of information traffic reveals a significant increase of investor IT-enabled information search in the post-financial-crisis period. It also shows higher search increases for accounting items that received previously scant investor attention.

If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. AbstractPurpose -This paper aims to examine whether information search frequency of accounting information is related to the explanatory power of accounting information for firm market value. It also examines whether information content and state of nature can have an impact on this relationship. Design/methodology/approach -The paper is an empirical study using Web search volume data collected from Google Trends and financial and market data collected from Compustat. Findings -This paper finds that investors use Web search engines as an alternative way to search for information they need, search frequency of accounting information is positively related to the explanatory power of accounting information for firm market value, the relationship is found differential between statements and categories within a statement depending on the information content and the relationship is found stronger during economic upturns. Research limitations/implications -This paper examines 59 accounting items that are cross-firm commonly reported and that have data availability in Compustat. The external validity might be an issue. Practical implications -This paper is of interest to standard setters, corporate management and academics who wish to understand and improve the value of accounting information in the capital market.

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