THE DEMAND FOR AND SUPPLY OF ACCOUNTING INFORMATION IN A MARKET SETTING AND ITS STOCK MARKET IMPACT

Topics: Financial statements, International Financial Reporting Standards, Stock Pages: 11 (2721 words) Published: March 22, 2014
UNIVERSITY OF LAGOS
SCHOOL OF POST-GRADUATE STUDIES

MASTER IN BUSINESS ADMINISTRATION PROGRAMME
2012/20123 SESSION
CORPORATE FINANCIAL REPORTING
ACC 813
THE DEMAND FOR AND SUPPLY OF ACCOUNTING INFORMATION
IN A MARKET SETTING AND ITS STOCK MARKET IMPACT

BY
ROSENJE SAFIRIYU ABIODUN
119029324
SUPERVISED BY
PROF. S.B ADEYEMI
JULY, 2013

Page 1

THE DEMAND FOR AND SUPPLY OF ACCOUNTING INFORMATION
IN A MARKET SETTING AND ITS STOCK MARKET IMPACT

Learning Objectics:
After reading this paper, the reader will be able to:
1. Know the meaning of accounting information
2. Explain the channels through which Accounting Information affect the Performance of the capital market
3. Explain the effect of market pressure on accounting decision 4. Identify regulators of Accounting Information and their regulatory roles 5. Highlight benefit of disclosure of Accounting Information 6. List the cost of disclosing Accounting Information

7. Explain the impacts of Accounting Information on stock market

Definition of Terms:
Accounting Information: The collection, storage and processing of financial and accounting data that are used by decision makers.
Accounting Information Systems: An accounting information system is generally a computer-based method for tracking accounting activity in conjunction with information technology resources. The resulting statistical reports can be used internally by management or externally by other interested parties including investors, creditors and tax authorities.

Accounting Disclosure: is to inform both current and potential investors of the accounting strategies and methods used when developing periodic corporate financial statements. These financial statements include, but are not limited to, the Statement of Financial Position (balance sheet), the statement of cash flows, the Statement of Comprehensive Income (income statement), and the statement of stockholders’ equity. The full disclosure principle requires that any event that would have an impact on the financial statements should be revealed. Cost of Capital: the opportunity cost of the funds employed as the result of an investment decision; the rate of return that a business could earn if it chose another investment with equivalent risk Market: A market is one of the many varieties of systems, institutions, procedures, social relations and infrastructures whereby parties engage in exchange

Page 2

Introduction
Accounting information and disclosure are potentially important means for management to communicate firm performance and governance to outside investors. It provides a framework for analyzing managers’ reporting and disclosure decisions in a capital markets setting, and identify key research questions. We then review current empirical research on disclosure regulation, information intermediaries, and the determinants and economic consequences of corporate disclosure. Increased globalization of financial and product markets has raised the interest of both market participants and regulators in the quality of financial reporting worldwide. The rise in the stability of stock returns across the globe in the past couple of years has also been a concern. Could greater transparency in financial statement information reduce stability and produce more accurate stock valuations? Could more transparent financial statements of financial services firms (for example, banks) improve lending and credit evaluation decisions and contain the risks of a banking crisis? These issues are of central interest to all market participants and, in particular, to the Nigeria Securities and Exchange Commission (SEC). accounting information is the product of corporate accounting and external reporting systems that measure and routinely disclose audited, quantitative data concerning the financial position and performance of publicly held firms. Audited balance sheets, income statements, and cash-flow statements, along with supporting...

References: Healy, M. and Palepu, G. 2001. Information asymmetry, corporate disclosure, and the capital
Page 10
markets: A review of the empirical disclosure literature
Institute of Chartered Accountants of Nigeria, 2004. Financial Reporting and Ethics p1-6
Kothari, S. 2002. The Role Of Financial Reporting in Reducing Financial Risks in the Market.
Mgbame, O. and Ikhatua, O. 2013. Accounting Information and Stock Volatility in the Nigerian
Capital Market: A Garch Analysis Approach.
Robert, M. and Abbie J. 2003, Transparency, Financial Accounting Information and Corporate
Governance
Page 11
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Stock Market Essay
  • Stock Market Essay
  • Demand Supply and Market Equilibrium Essay
  • Stock Market and Information Efficiency Essay
  • Demand, Supply and Market Equilibrium Essay
  • Essay about The Market Forces Of Supply And Demand
  • Supply and Demand, Markets, Prices and Price Setting Essay
  • Demand, Supply and Market Equilibrium Essay

Become a StudyMode Member

Sign Up - It's Free