Reference no: EM132822054

Problem 1: Accounting theorists claim that, from society's standpoint, private information search is less efficient than having the firm itself released the information in question. Why?

a. Existence of insider trading
b. firms may engage in selective disclosure
c. more costly if investors search for information
d. more accurate if firms for this information

Problem 2: Which of the following statements explains the findings by Eliot and Hanna 1996 the earnings response coefficient of firms that frequently record large unusual an nonrecurring expenses are smaller than firms that do not record such expenses ?

a. These expense tend to inflate reported future core earnings
b. these expenses reflect low growth
c. these expenses tend to reduce reported future core earnings
d. these expenses reduce farm risk