Accounting Policy Decisions and Capital Market Research

This paper examines methodological problems in measuring the capital market impact of accounting policy decisions. Topics covered include the development of hypotheses about the magnitude and timing of capital market impacts, sample selection issues in control group designs, and the confounding events problem. Reference is made to capital market studies on a variety accounting policy decisions. Empirical evidence related to studies on the capital market impact of Statement of Financial Accounting Standards No.19 is also presented.