The Impact of of Accounting Information on Stock Returns – Integrative Literature Review

Mutaz A.  Alshaikh

doi:10.46977/apjmt.2022v03i01.002

Authors

Mutaz A. Alshaikh University of Jeddah- Saudi Arabia

DOI:

https://doi.org/10.46977/apjmt.2022v03i01.002

Keywords:

Accounting Information, Stock Returns, Empirical Framework

Abstract

The literature review provides an integrative (and occasionally critical) review and evaluation of relevant literature. This is mostly done by putting this study in the context of relevant research in capital markets accounting and asset pricing, such as arbitrage pricing and the empirical evidence on return anomalies. This research is related to a few key areas of the existing literature, including accounting for capital markets research, empirical asset pricing research, and the significance of idiosyncratic accounting information. The empirical methodology used in this study, which falls under the purview of arbitrage pricing theory, offers a specification for empirical asset pricing accounting where average equity returns are justified in terms of the accuracy of accounting data. This literature creates a case for investigating the plausible impact of the quality of accounting information on expected equity returns and asset prices. The study meets its objectives by estimating a multifactor asset pricing model where a variable measurement representing the construct of accounting information is on the explanatory side of the model. Toward this end, this study is designed to document empirical evidence with respect to the impact of the quality of accounting information on stock returns.

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