The relationship between accounting choices and share prices : a study of South African listed companies

Bunting, Mark Bevan

Title: The relationship between accounting choices and share prices : a study of South African listed companies
Creator: Bunting, Mark Bevan
Subject: Financial statements -- South Africa
Subject: Accounting -- South Africa
Subject: Managerial accounting -- South Africa
Date Issued: 2009
Date: 2009
Type: Thesis
Type: Masters
Type: MCom
Identifier: vital:989
Identifier: http://hdl.handle.net/10962/d1002724
Identifier: Financial statements -- South Africa
Identifier: Accounting -- South Africa
Identifier: Managerial accounting -- South Africa
Description: It is widely assumed that the managers of companies behave in a self-interested and opportunistic manner when making the discretionary accounting choices that are applied in the preparation of published financial reports. Empirical research has found evidence for this in the United States, Britain, Spain, France and Australia, amongst other countries. There has, however, been no prior work of a similar nature in a South African context. The purpose of this study is to extend this body of work by examining the relationship between a number of potentially opportunistic (profit-increasing, income-smoothing and solvencyimproving) accounting choices made by the managers of South African listed companies, and growth rates in the share prices of those companies. Data in respect of thirty-nine medium-sized South African listed companies are analysed for evidence of the expected positive relationship between opportunistic accounting choices and share price growth. No evidence is found for this relationship. This may be due to limitations in the research design, inadequacies in the interpretation of the agency theory from which the hypotheses are developed, or a combination of both. Refinements in the research design or a re-interpretation of the theory may be successful in addressing these matters as part of future research efforts.
Format: 70 leaves
Format: pdf
Publisher: Rhodes University
Publisher: Faculty of Commerce, Economics
Language: English
Rights: Bunting, Mark Bevan

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Bunting, Mark Bevan (Assoc Prof)

RU Department of Economics and Economic History

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