Information asymmetry and accounting restatement: NYSE-AMEX and NASDAQ evidence

Current Market Top Business Scopes Trend—A Concurrent Text and Time Series Active Learning Study of NASDAQ and NYSE Stocks from 2012 to 2017

“…Haldane [27] used annual reports of certain companies in NASDAQ to monitor operation states. Nguyen [28] explained the information asymmetry and accounting restatement in some NASDAQ and NYSE companies with the help of analysis on the daily news texts.…”

Financial Restatement Research Literature Review

“…This makes investors uncertain about the company's current and future financial reporting reliability, and concerns about the company's future profitability, resulting in negative market returns and reduced company value. The empirical results of Anderson and Yohn [15] and Nguyen and Puri [16] also prove that the share price will drop significantly after the financial restatement announcement, resulting in a significant negative abnormal return. Hribar and Jenkins [17] found that restatement would lead to a decline in the company's expected future earnings and increase the company's cost of equity capital.…”

“…The difference is that the former finds that the impact of restatement is short-lived, while the latter finds that the impact of restatement on investor confidence is long-term. Kravet et al [20], Nguyen and Puri [16] found from the perspective of information risk and information asymmetry that the company's information risk factors and information asymmetry will increase significantly after financial restatement, reducing investors' future development of the company. Prospects for expectations will re-evaluate financial reporting information, require larger bid-ask spreads, and increase information costs.…”