A Test of Accounting Information Using SEC Accounting Scandals and Surprise Earnings Per Share Reports

The goal of this paper is to document a relation between the price of a company's stock and release of public information. I examine how accounting scandals and earnings reports change the price of a company's stock. I run my data through EVENTUS and check for statistical significance. If there is a statistical significance, then it can be stated that accounting information matters. The test results from my study revealed that there was no statistical significance between accounting scandal and stock market prices but there did exist a positive correlation between surprise earning announcements and stock market prices.