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Accounting: a source of market imperfection
Author(s) -
BIRKETT W. P.,
WALKER R. G.
Publication year - 1974
Publication title -
journal of business finance and accounting
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.282
H-Index - 77
eISSN - 1468-5957
pISSN - 0306-686X
DOI - 10.1111/j.1468-5957.1974.tb00858.x
Subject(s) - accounting , audit , position (finance) , business , quality (philosophy) , accounting information system , economics , finance , epistemology , philosophy
Evidence is presented to show that accounting reports do not necessarily represent the position and performince of firms, and that audit reports are ambiguous indicators of the quality of accounting information. As such, contemporary accounting practices contribute to ‘imperfection’ in the securities market, and hence are likely to lower the efficiency of the securities market in allocating resources to productive uses.