Recently, a growing body of literature has suggested that financial statements have lost their value relevance because of a shift from a traditional capital-intensive economy to a hightechnology, service-oriented economy. These conclusions are based on studies that find a temporal decline in the association between stock prices and accounting information (earnings and book values). This paper empirically tests a theoretical prediction arising from the Noisy Rational Expectations Equilibrium model that suggests that the decline could be driven by noninformation-based (NIB) trading activity, because such trading reduces the ability of stock prices to reflect accounting information. Specifically, Dontoh et al. (2004) show that when NIB trading increases, the R-squares of a regression of stock price on accounting information declines. Our empirical tests confirm this prediction; i.e., the decline in the association between stock prices and accounting information as measured by R-squares is driven by an increase in NIB trading.
Fair value is considered here with respect to the two primary objectives of financial statements proposed in the joint conceptual framework that is under development by the FASB and the IASB, namely (a) informativeness-to assist providers of capital in predicting, evaluating, and comparing the amounts, timing and uncertainty of future cash flows, and (b) stewardship-to assist in evaluating how efficient and effective managers have been in enhancing shareholders' value. More specifically, a comprehensive set of accounting measures and a set of corporate governance reforms intended to align corporate insiders' and auditors' behaviour and decisions with the interests of investors is outlined. Suggested reforms show how to present a mix of effectively historical quantifications, exit values, and the discounted values of future cash flows expected from the particularized use of combinations of assets within the firm. Additionally, the article describes how markets can be reformed in order to align the interests of the officers who prepare such accounts, and the auditors who certify them, with those of investors. These market-based reforms would require auditors to insure misrepresentations, and managers to take equity to induce truthful reporting. Also included is a radical extension to earlier proposals by the author, requiring an officer of the company to make the market in shares in a way that would place limits upon the value of the insider's private information.
Applieation of incorrect statie shifts will deerease the power of the eommon-depth-point staek. Conversely, statie shifts ean be estimated by maximizing the staek power. We tried it and it worked weil enough that we reeommend it in routine practice for data with low signal-to-noise ratio.Likewise, stack power was maximized by adjustment of surfaee-eonsistent phase correction.
Spatial aliasing in multichannel seismic data can be overcome by solving an inversion in which the model is the section that would be recorded in a well sampled zero-offset experiment, and the data are seismic data after normal moveout (NMO). The formulation of the (linear) relation between the data and the model is based on the wave equation and on Fourier analysis of aliasing. A processing sequence in which one treats missing data as zero data and performs partial migration before stacking is equivalent to application of the transpose of the operator that actually needs to be inverted. The inverse of that operator cannot be uniquely determined, but it can be estimated using spatial spectral balancing in a conjugate-gradient iterative scheme. The first iteration is conventional processing (including prestack partial migration). As shown in a field data example in which severe spatial aliasing was simulated, a few more iterations are necessary to achieve significantly better results.
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