1. Accounting: a source of market imperfection.
- Author
-
Birkett, W. P. and Walker, R. G.
- Subjects
ACCOUNTING ,RATE of return ,CORPORATE profits ,CORPORATION reports ,EFFICIENT market theory ,RATIO analysis ,REVENUE management ,CAPITAL investments - Abstract
This article discusses the accounting practices that contributed to the imperfection of securities market. Accounting reports are sources of financial information on the present position and past performance of individual firms according to the author where investors can calculate the rate of return on total assets employed in the firm's operations and the rate of return on shareholder's equity. Evidence is presented to show that accounting reports do not necessarily represent the position and performance of firms and that audit reports are ambiguous indicators of the quality of accounting information.
- Published
- 1974
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