2019
DOI: 10.1007/s11156-019-00825-4
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Risk dynamics around restatement announcements

Abstract: We investigate the dynamic nature and temporal daily changes in systematic (beta), as well as idiosyncratic and total risk around restatement announcements. We find that beta increases by 51% at restatement announcement but it reverts to the prerestatement level within one month. However, idiosyncratic risk experiences a longerterm increase of approximately 20% following a restatement. Cross-sectional analysis shows that the results are more pronounced for restatements associated with irregularity. Overall, ou… Show more

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Cited by 1 publication
(2 citation statements)
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“…This leads to a more common phenomenon of the financial restatement. Secondly, in the existing literature, such as Bardos et al (2020) and Bhatti et al (2021), the impact of information disclosure quality of listed companies on stock price risk has been involved. The measurement variables they use include the amount of information disclosure, information content, earnings quality.…”
Section: Introductionmentioning
confidence: 99%
See 1 more Smart Citation
“…This leads to a more common phenomenon of the financial restatement. Secondly, in the existing literature, such as Bardos et al (2020) and Bhatti et al (2021), the impact of information disclosure quality of listed companies on stock price risk has been involved. The measurement variables they use include the amount of information disclosure, information content, earnings quality.…”
Section: Introductionmentioning
confidence: 99%
“…Therefore, there is no uniform conclusion about whether information risk can be transferred through diversified investment. Further, even in the literature which believes that information risk can reflect in price compensation, there is no consistent conclusion about whether information risk only exists near the time of information change or whether it exists for a long time (Bardos et al , 2020). A financial restatement provides an opportunity to study the risk of stock information.…”
Section: Introductionmentioning
confidence: 99%