IMPACTS ON THE DISCLOSURE OF LOSSES ON STOCK RETURNS OF COMPANIES LISTED ON IBOVESPA

Abstract

The recent growth of the positive approach to accounting theory highlighted the need for empirical tests for validation of accounting practices. In this context, that of an area of empirical research that has become influential, the objective of the current work was to investigate the influence of accounting information in the stock market. The way the market reacts to the specific information in the current financial statements supports analysis of the utility of the principal accounting communication instruments. Among the specific information, earnings are shown to be one of the most important, describing the growth capacity and potential of the firm to create value. In this way, the present works sought to identify the reactions of the stock market, in light of the announcement of unfavorable results (loss) presented by publicly traded companies. The study discussed was analyzed using the event-study methodology which investigates the impact of public information impact on the capital market. The results demonstrated that disclosure of losses was presented as important accounting information, one that generated negative reactions in the stock market as prices and returns fall in most stocks from the sample analyzed in the research. Evidence was also found of the semi-strong efficiency of the Brazilian stock market in relation to that information, since abnormal returns seemed to disappear after two trading days subsequent to disclosure. Keywords: Abnormal returns. Loss. Event studies. Quality of accounting information.