Hutchens, Michelle
[VerfasserIn]
;
Rego, Sonja O.
[Sonstige Person, Familie und Körperschaft];
Williams, Brian
[Sonstige Person, Familie und Körperschaft]
The Impact of Standard Setting on Individual Investors
: Evidence From SFAS 109
Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments February 2020 erstellt
Beschreibung:
We examine the response of individual investors to firms' adoptions of SFAS 109–Accounting for Income Taxes. We predict SFAS 109 (as compared to APB 11) provides new decision-useful information, reducing the information disadvantage of individual investors relative to more sophisticated investors. Using monthly individual investor stock holdings data and staggered firm adoptions of SFAS 109, we provide evidence that individual investors increased their holdings in firms more affected by the new accounting standard. The increases are concentrated among less sophisticated individual investors. We further provide evidence that the increased demand among individual investors following SFAS 109 adoption is concentrated in firms with substantive improvements to disclosure and those with a concurrent decrease in analyst forecast dispersion. Our findings highlight the importance of evaluating how improved accounting standards can benefit a key stakeholder of the SEC and FASB: individual investors