JSE efficiency and share price reaction to forced financial restatements
This study uses an event study methodology to empirically examine share price reaction to financial restatement announcements resulting from investigations or recommendations by the GAAP Monitoring Panel and tests, in semi-strong form, the efficiency of the Johannesburg Securities Exchange (JSE). Th...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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AOSIS
2012-10-01
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| Series: | Journal of Economic and Financial Sciences |
| Subjects: | |
| Online Access: | https://jefjournal.org.za/index.php/jef/article/view/292 |
| _version_ | 1811328925306978304 |
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| author | Shaun Watson Jacobus Rossouw |
| author_facet | Shaun Watson Jacobus Rossouw |
| author_sort | Shaun Watson |
| collection | DOAJ |
| description | This study uses an event study methodology to empirically examine share price reaction to financial restatement announcements resulting from investigations or recommendations by the GAAP Monitoring Panel and tests, in semi-strong form, the efficiency of the Johannesburg Securities Exchange (JSE). The results indicate that companies making such financial restatement announcements experience significant negative standardised abnormal returns ten days before and five days subsequent to the announcement. As evidenced by the significant negative standardised abnormal returns, it would appear that the announcements convey new information to the market. Although the lack of consecutive negative standardised abnormal returns around the announcement date would suggest that the JSE is efficient in semi-strong form, the five-day time lag between the announcement date and the significant negative standardised abnormal return supports the rejection of semi-strong form efficiency of the JSE. |
| first_indexed | 2024-04-13T15:34:41Z |
| format | Article |
| id | doaj.art-aa8075a226704b2895f6f7a2165391ad |
| institution | Directory Open Access Journal |
| issn | 1995-7076 2312-2803 |
| language | English |
| last_indexed | 2024-04-13T15:34:41Z |
| publishDate | 2012-10-01 |
| publisher | AOSIS |
| record_format | Article |
| series | Journal of Economic and Financial Sciences |
| spelling | doaj.art-aa8075a226704b2895f6f7a2165391ad2022-12-22T02:41:18ZengAOSISJournal of Economic and Financial Sciences1995-70762312-28032012-10-015241743610.4102/jef.v5i2.292233JSE efficiency and share price reaction to forced financial restatementsShaun Watson0Jacobus Rossouw1Centre of Accounting, University of the Free StateCentre of Accounting, University of the Free StateThis study uses an event study methodology to empirically examine share price reaction to financial restatement announcements resulting from investigations or recommendations by the GAAP Monitoring Panel and tests, in semi-strong form, the efficiency of the Johannesburg Securities Exchange (JSE). The results indicate that companies making such financial restatement announcements experience significant negative standardised abnormal returns ten days before and five days subsequent to the announcement. As evidenced by the significant negative standardised abnormal returns, it would appear that the announcements convey new information to the market. Although the lack of consecutive negative standardised abnormal returns around the announcement date would suggest that the JSE is efficient in semi-strong form, the five-day time lag between the announcement date and the significant negative standardised abnormal return supports the rejection of semi-strong form efficiency of the JSE.https://jefjournal.org.za/index.php/jef/article/view/292JSE efficiencyrestatement of financial statementsevent studyabnormal returnsGAAP Monitoring Panel |
| spellingShingle | Shaun Watson Jacobus Rossouw JSE efficiency and share price reaction to forced financial restatements Journal of Economic and Financial Sciences JSE efficiency restatement of financial statements event study abnormal returns GAAP Monitoring Panel |
| title | JSE efficiency and share price reaction to forced financial restatements |
| title_full | JSE efficiency and share price reaction to forced financial restatements |
| title_fullStr | JSE efficiency and share price reaction to forced financial restatements |
| title_full_unstemmed | JSE efficiency and share price reaction to forced financial restatements |
| title_short | JSE efficiency and share price reaction to forced financial restatements |
| title_sort | jse efficiency and share price reaction to forced financial restatements |
| topic | JSE efficiency restatement of financial statements event study abnormal returns GAAP Monitoring Panel |
| url | https://jefjournal.org.za/index.php/jef/article/view/292 |
| work_keys_str_mv | AT shaunwatson jseefficiencyandsharepricereactiontoforcedfinancialrestatements AT jacobusrossouw jseefficiencyandsharepricereactiontoforcedfinancialrestatements |