Academic literature on the topic 'Nonprofessional investors'
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Journal articles on the topic "Nonprofessional investors"
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Frederickson, James R., and Jeffrey S. Miller. "The Effects of Pro Forma Earnings Disclosures on Analysts' and Nonprofessional Investors' Equity Valuation Judgments." Accounting Review 79, no. 3 (July 1, 2004): 667–86. http://dx.doi.org/10.2308/accr.2004.79.3.667.
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This paper presents an experiment that examines the effect of pro forma earnings disclosures on the judgments of analysts (i.e., more sophisticated investors) and nonprofessional (i.e., less sophisticated) investors. In the experiment, participants developed stock price assessments after reviewing background financial information and a current earnings announcement for a company. The earnings announcement was manipulated to report only GAAP earnings in one condition and both pro forma and GAAP earnings in the other condition. Consistent with empirical evidence, the pro forma earnings in our experiment exceeded GAAP earnings. The results indicate that nonprofessional investors who received an earnings announcement that contained both pro forma and GAAP disclosures assessed a higher stock price than did nonprofessionals who received an announcement containing only GAAP disclosures. Financial analysts' stock price judgments were not affected by the pro forma disclosures. Followup analyses suggest that analysts and nonprofessional investors used different valuation models and information processing. Analysts used well-defined valuation models, based on either earnings-multiples or cash flows, while the nonprofessional investors were more likely to use simpler, heuristic-based valuation models. The pro forma disclosure did not cause nonprofessional investors to assess a higher earnings number for determining a stock price, but rather caused nonprofessionals to perceive the earnings announcement as more favorable, which in turn caused them to convert earnings or some other performance metric into a higher stock price. This effect appears to be due to unintentional cognitive effects, rather than nonprofessionals relying on pro forma earnings information because they perceived it to be informative.
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Cohen, Jeffrey R., Lori Holder-Webb, and Valentina L. Zamora. "Nonfinancial Information Preferences of Professional Investors." Behavioral Research in Accounting 27, no. 2 (June 1, 2015): 127–53. http://dx.doi.org/10.2308/bria-51185.
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ABSTRACT Academics, regulators, and the general business community have called for the assessment of the decision-usefulness of three key categories of nonfinancial information: economic, governance, and corporate social responsibility (CSR). This study builds on prior research by examining the nonfinancial information preferences of professional investors, how their demand for the nonfinancial information categories compares to those of nonprofessional investors, and whether these demands vary across subgroups of professional investors. Based on survey responses from 228 professional investors, the results show that this investor class prefers nonfinancial information that is concise, comprehensive, comparable, and credible. Similar to prior research, the results indicate that professional and nonprofessional investors have similar demand orderings: they are most interested in economic information, then governance information, and then CSR information. However, professional investors demand greater detail than do nonprofessional investors for subcategories of economic and governance information. Further, while both professional and nonprofessional investors' demand is increasing for all subcategories of governance and CSR information, the change in demand is more pronounced for nonprofessional relative to professional investors, and particularly for CSR information subcategories. These variations in preferences suggest potential differences in perspectives between professional and nonprofessional investors. Finally, the findings indicate that institutional investors have recently used less economic information. For the subgroups whose investment research consists of at least a quarter of socially responsible investments (SRI), the higher the SRI investor level, the higher the recent usage of more information categories; and the higher the SRI investor level, the higher the future demand for economic information, but the lower the SRI investor level, and the higher the demand for CSR information. These findings suggest potential differences in investment approaches among subgroups of professional investors. Together, these results provide support for more integrated reporting of nonfinancial information to meet professional investors' multidimensional preferences and differences in demand relative to those of nonprofessional investors.
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Bailey, Wendy J., and Kimberly M. Sawers. "In GAAP We Trust: Examining How Trust Influences Nonprofessional Investor Decisions Under Rules-Based and Principles-Based Standards." Behavioral Research in Accounting 24, no. 1 (December 1, 2011): 25–46. http://dx.doi.org/10.2308/bria-50071.
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ABSTRACT In this study, we investigate whether and how trust in our current, more rules-based financial reporting system and type of accounting standard affects nonprofessional investor decision making. In an experiment, 151 nonprofessional investors analyzed two companies that were economically identical except for a single underlying financial reporting difference that allowed one company to more positively report its financial results. By itself, the type of standard (rules-based, principles-based) did not affect investment choices or allocation decisions. However, when trust was considered, nonprofessional investors who are less trusting of our current financial reporting system chose to invest in a company with more positive financial results only when evaluating principles-based financial statements. Conversely, the type of standard did not affect investor decision making for nonprofessional investors who trust our current financial reporting system. These results have implications for standard setters as we move to a more principles-based accounting system. Data Availability: Available on request.
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Kipp, Peter C., Yibo (James) Zhang, and Amanuel F. Tadesse. "Can Social Media Interaction and Message Features Influence Nonprofessional Investors' Perceptions of Firms?" Journal of Information Systems 33, no. 2 (February 1, 2018): 77–98. http://dx.doi.org/10.2308/isys-52067.
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ABSTRACT We investigate the impact of social media messages on nonprofessional investors' assessments of management credibility and firm value. In a between-participants experiment, we examine the joint effect of social media message vividness, valence, and micro-blogger influence on nonprofessional investors' assessments of management credibility and firm value. We find that when social media messages are pallid and negative (positive), high micro-blogger influence decreases (increases) nonprofessional investors' assessments of management credibility. In contrast, the effect is absent when messages are vivid. Further, we find that the effect of micro-blogger influence on nonprofessional investors' assessments of blogger credibility and management credibility is mediated by social media interactions. The assessment of management credibility, in turn, significantly impacts nonprofessional investors' firm valuation assessment. The results have implications for regulators (SEC 2013) that may wish to update their guidance to managers on how to monitor or even control nonprofessional investors' interaction on social media platforms. Data Availability: Contact the authors.
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Dilla, William, Diane Janvrin, Jon Perkins, and Robyn Raschke. "Investor views, investment screen use, and socially responsible investment behavior." Sustainability Accounting, Management and Policy Journal 7, no. 2 (May 3, 2016): 246–67. http://dx.doi.org/10.1108/sampj-07-2015-0066.
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Purpose Despite the increasing demand for socially responsible investments (SRIs) and the importance of information intermediaries in providing corporate social responsibility (CSR) performance information through SRI screens, relatively little is known about the relationship between nonprofessional investors’ views regarding SRI, their use of SRI screens and their actual SRI behavior. This study aims to distinguish between investor views about the importance of corporate environmental responsibility (environmental performance importance views) and whether they view environmentally responsible firms as yielding higher returns (environmental performance return views). It examines the association between these views, SRI screen use and reported SRI holdings. Design/methodology/approach Nonprofessional investor participants completed an online survey about their SRI investment views, screen use and investment behavior. The survey yielded 201 usable responses. Findings The strength of participants’ environmental performance importance and environmental performance return views is positively associated with their use of SRI screens and the proportion of their portfolios held in SRIs. SRI screen use only partially mediates the association between investors’ environmental performance importance and return views and their SRI holdings. Research limitations/implications The study does not precisely address what types of SRI screens nonprofessional investors may be using. It does not control for investors’ specific experience with SRIs, nor does it examine how or why investors come to believe that environmental responsibility may improve a company’s return potential. Practical implications The fact that SRI screen use only partially mediates the association between investors’ views and their SRI holdings suggests that either reliable, unfiltered CSR information is important for nonprofessional investors or some investors are choosing SRIs without obtaining adequate relevant information. Social implications The study’s findings confirm earlier research findings which show an association between investors’ pro-environmental views and their decision to invest in SRIs (Williams, 2007; Nilsson, 2008) and suggest that nonprofessional investors are becoming aware of the positive relation between environmental performance and firm value (Dhaliwal et al., 2011; Clarkson et al., 2013; Hawn et al., 2014; Matsumura et al., 2014). Originality/value This study simultaneously examines the influence of environmental performance importance (an “alternative” investment perspective) and environmental performance return (a “traditional” investment perspective) on investors’ SRI behavior.
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Elliott, W. Brooke, Frank D. Hodge, Jane Jollineau Kennedy, and Maarten Pronk. "Are M.B.A. Students a Good Proxy for Nonprofessional Investors?" Accounting Review 82, no. 1 (January 1, 2007): 139–68. http://dx.doi.org/10.2308/accr.2007.82.1.139.
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We investigate a key assumption underlying much of the experimental research in financial accounting that graduate business students are a good proxy for nonprofessional investors. To conduct our investigation, we categorize recent experimental studies in financial accounting, based on the relative level of integrative complexity inherent in each study's task. We then conduct experiments using two tasks, one that is relatively low in integrative complexity and one that is relatively high in integrative complexity, and compare the responses of two groups of M.B.A. students and nonprofessional investors. Our results suggest that using M.B.A. students as a proxy for nonprofessional investors is a valid methodological choice, provided researchers give careful consideration to aligning a task's integrative complexity with the appropriate level of M.B.A. student. M.B.A. students who have completed their core M.B.A. courses and are enrolled in or have completed a financial statement analysis course are a good proxy for nonprofessional investors in tasks that are relatively low in integrative complexity. Though less definitive, the majority of our tests also suggest that these students are a good proxy for nonprofessional investors in tasks that are relatively high in integrative complexity. However, care must be taken when using students in the first-year core financial accounting course. In tasks that are relatively low in integrative complexity, these students perform similarly to nonprofessional investors except when they are asked to make an investment decision. In tasks that are relatively high in integrative complexity, these students acquire information similarly to nonprofessional investors, but they do not appear to integrate the information in a similar manner.
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Rose, Jacob M., Carolyn Strand Norman, and Anna M. Rose. "Perceptions of Investment Risk Associated with Material Control Weakness Pervasiveness and Disclosure Detail." Accounting Review 85, no. 5 (September 1, 2010): 1787–807. http://dx.doi.org/10.2308/accr.2010.85.5.1787.
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ABSTRACT: This research examines whether investors adjust their assessments of investment risk in response to material control weakness disclosures, the pervasiveness of material control weaknesses, and the detail of explanation provided regarding the pervasiveness of material control weaknesses. Findings from a laboratory experiment with 97 nonprofessional investors, a second experiment with 53 nonprofessional investors, and surveys of 47 investors and 28 Fortune 500 directors confirm prior archival findings that investors adjust their investment risk assessments in response to material weakness disclosures. More importantly, we find evidence of an interactive effect of material control weakness pervasiveness and disclosure detail that is counter to the expected benefits of expanded disclosure desired by corporate directors. When material weakness disclosures include specific and detailed discussion of the pervasiveness of control weaknesses, investors increase assessments of investment risk for less pervasive weaknesses and decrease assessments of risk for more pervasive weaknesses. Results indicate that these findings are driven by different levels of investor trust in management.
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Owens, Joel, and Erin M. Hawkins. "Using Online Labor Market Participants for Nonprofessional Investor Research: A Comparison of MTurk and Qualtrics Samples." Journal of Information Systems 33, no. 1 (February 1, 2018): 113–28. http://dx.doi.org/10.2308/isys-52036.
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ABSTRACT Recently, researchers have begun using online labor markets to recruit participants for experimental studies examining the judgments and decisions of nonprofessional investors. This study investigates the quality and generalizability of data collected from these sources by replicating an experimental task from Elliott, Hodge, Kennedy, and Pronk (2007) using nonprofessional investor participants from two popular online labor markets—Amazon's Mechanical Turk (MTurk) and Qualtrics Online Sample (Qualtrics). Compared to Qualtrics participants, we find that MTurk participants pay greater attention to the experimental materials and better acquire and recall information. Further, the MTurk sample more closely replicates EHKP's investment club member results on measures of information integration than does the Qualtrics sample. These results provide some evidence that many interesting research questions can be satisfactorily answered using nonprofessional investor participants from MTurk. We believe further investigation is needed before Qualtrics can be endorsed as a high-quality source of nonprofessional investor participants.
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Zhang, James (Yibo). "The Impact of Vivid Graphical Presentation of Financial Information in Digital Annual Reports on Investors' Impressions of Management and Firm Performance." Journal of Information Systems 34, no. 3 (August 5, 2019): 233–53. http://dx.doi.org/10.2308/isys-52533.
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ABSTRACT This study examines the effect of graphical vividness on nonprofessional investors' impressions of management and firm performance when the financial performance news is either positive or negative. Conducting a 2 × 2 between-participants experiment with 470 participants from Amazon Mechanical Turk (M-Turk), I find that when the news is positive, nonprofessional investors have more positive impressions of management, which, in turn, leads to more positive impressions of firm performance when the graphical presentation is vivid versus pallid. In contrast, when the news is negative, presenting graphs vividly has little effect on nonprofessional investors' impressions. The study contributes to regulators and practice by demonstrating that allowing a high degree of presentation flexibility in digital annual reports has behavioral outcomes to nonprofessional investors' judgments and decisions. The study also contributes to the strategic disclosure literature by demonstrating the impact of graphical vividness in presenting financial performance information.
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Janvrin, Diane J., Robert E. Pinsker, and Maureen Francis Mascha. "XBRL-Enabled, Spreadsheet, or PDF? Factors Influencing Exclusive User Choice of Reporting Technology." Journal of Information Systems 27, no. 2 (July 1, 2013): 35–49. http://dx.doi.org/10.2308/isys-50569.
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ABSTRACT U.S. adoption of eXtensible Business Reporting Language (XBRL)-enabled technology has been slow. Prior experimental evidence suggests that even when XBRL-enabled technology is available, almost 50 percent of participants do not use it. This study informs AIS researchers on the state of XBRL-enabled technology by using an exclusive choice experimental design to examine (1) which reporting technology nonprofessional investors will choose to complete a financial analysis task (XBRL-enabled, portable document file, or spreadsheet), and (2) why they choose the specific technology. Findings indicate that 66 percent of nonprofessional investors chose XBRL-enabled technology, while 34 percent chose spreadsheets. Participants who chose the former perceived that it reduces the time to complete the task (i.e., increases task efficiency), while participants who chose the latter indicated their choice was driven by prior technology experience. Study results have implications for the Securities and Exchange Commission (SEC), researchers examining nonprofessional investor behavior, user choice literature, and XBRL-enabled technology adoption.
Dissertations / Theses on the topic "Nonprofessional investors"
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Soares, Ana Luísa. "Delineating efficient portfolios : can nonprofessional investors be efficient?" Master's thesis, Instituto Superior de Economia e Gestão, 2018. http://hdl.handle.net/10400.5/20431.
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Mestrado em FinançasNa própria base da teoria financeira reside a teoria da tomada de decisões sob incerteza e risco. É crucial compreender como e por que razão as pessoas tomam decisões, bem como como as deviam tomar. Esta tese procura compreender melhor como os investidores não profissionais mas especialistas em finanças se comportam nos mercados financeiros e se tendem a escolha carteiras eficientes. Por isso, realizei uma experiência com uma amostra de alunos da pós-graduação de AF (29ª edição) para examinar como iriam calcular as suas carteiras entre uma seleção diversificada de ativos. Utilizando dados históricos, consegui calcular a Carteira Tangente e a Carteira de Variância Mínima com o objetivo de comparar com as Carteiras selecionadas pelos participantes. Os resultados sugerem que estes não são tendem a calcular a Carteira Tangente nem de escolher carteiras pertencentes à Fronteira Eficiente, não obstante o seu conhecimento técnico. Assim, na medida em que esta amostra representa investidores não profissionais que são especialistas em finanças, concluo que não se espera que esta classe de investidores tome decisões de investimento eficientes no sentido de Markowitz.
At the very foundation of financial theory lies the theory of decision-making under uncertainty and risk. Understanding how and why people make decisions, as well as how they should be making decisions, is crucial. This thesis seeks to better understand how nonprofessional investors who are experts in finance behave in the financial markets and if they tend to choose efficient portfolios. Therefore, I conducted an experience with students from the post graduation in Análise Financeira (29th Edition) to examine how they would compute their Portfolios among a diversified selection of assets. Using historical data, I was able to compute the tangency portfolio and the minimum variance portfolio in the Efficient Frontier with the aim of comparing with the Portfolios chosen by each student. I report that the great majority of respondents were not able to compute the Tangency Portfolio nor choose Portfolios belonging to the Efficient Frontier despite their technical knowledge. To the extent this sample represent experts on finance that are non-professional investors, I conclude that such class of investors are not expected to make efficient decisions in the Markowitz sense.
info:eu-repo/semantics/publishedVersion
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Hughes, Mark, and n/a. "The format effects of operating lease disclosures on the quality of decision-making by non-professional investors." University of Canberra. Law, 2003. http://erl.canberra.edu.au./public/adt-AUC20060203.114404.
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The recent proposal by the Group of Four Plus One to modify the accounting
treatment of operating leases has attracted considerable comment. However, a review
of the publicly available submissions to this proposal reveals that no one has
addressed the issue in terms of the primary objective of general purpose financial
reports, that is, to provide decision useful information to non-professional investors.
This thesis seeks to redress this gap by providing some evidence of the ability of nonprofessional
investors to evaluate operating leases as they are presented according to
current accounting standards and alternative presentation formats.
The thesis reports the results of an experiment carried out on surrogates for nonprofessional
investors. The main finding is that the vast majority of subjects were
unable to evaluate operating lease information when it was disclosed in the notes,
rather than reported in the body of the Statement of Financial Position. Subjects
consistently relied on reported figures and seemed unable to incorporate information
presented in the notes to the financial reports, even when the links between the notes
and the reported figures were made more obvious than is currently the case.
The finding has a number of implications. It would appear that the existing accounting
treatment of operating leases is the source of a structural information asymmetry, as a
substantial proportion of users were unable to evaluate information relating to
operating leases. This information asymmetry should be removed for reasons of
economic efficiency. The recent withdrawal by non-professional investors from
equity markets shows that non-professional investors will react strongly if they start to
doubt the ability of general-purpose financial reports to provide them with decision
useful information.
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Humphrey, Roberta Lynn. "The influence of comprehensive income reporting on the judgments of nonprofessional investors : an experimental examination of functional fixation /." Full text available from ProQuest UM Digital Dissertations, 2007. http://0-proquest.umi.com.umiss.lib.olemiss.edu/pqdweb?index=0&did=1850402791&SrchMode=1&sid=11&Fmt=2&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1278704648&clientId=22256.
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Thesis (Ph.D.)--University of Mississippi, 2007.Typescript. Vita. "November 30, 2007." Major professor: Dr. W. Mark Wilder Includes bibliographical references (leaves 124-130). Also available online via ProQuest to authorized users.
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Zhang, (James) Yibo. "Three Essays on Digital Annual Reports for Nonprofessional Investors: The Impacts of Presentation Formats on Investment-Related Judgments and Decisions." Scholar Commons, 2018. https://scholarcommons.usf.edu/etd/7656.
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The goal of this dissertation is to investigate the impact of presentation formats on nonprofessional investors’ impressions of firm performance in the context of digital annual reports. The dissertation implements a three-essay approach.
Essay 1 examines whether the effect of positive/negative financial performance news on nonprofessional investors’ impressions of management and firm performance depends on whether the graphical display of that news is vivid or pallid. Conducting a 2 x 2 between-participants experiment with 470 participants from Amazon Mechanical Turk (M-Turk), I find that when the news is positive, presenting graphs vividly allows nonprofessional investors to have a more positive impression of management and firm performance. In contrast, when the news is negative, presenting graphs vividly has little effect on nonprofessional investors’ impressions. The essay informs regulators and practice by demonstrating that vivid graphical website disclosures can significantly affect the behavior of nonprofessional investors when the financial performance news is positive, but the effect is minimal when the news is negative. The essay also contributes to the financial disclosure literature by demonstrating the impact of graphical vividness in presenting financial performance information.
Essay 2 conducts a 2 x 2 between-participants experiment with 565 participants from M-Turk. I investigate whether varying the user interactivity and graphical vividness of the presentation of non-financial good news counteracts bad news presented in the audited financial data. I find a positive effect of user interactivity when the graphical presentation of non-financial information is vivid but not when it is pallid. In mediation analyses, I find unexpected results in that user engagement negatively mediates the effects of user interactivity on nonprofessional investors’ perceptions of firm performance and investment-related judgments and decisions. Subsequent analyses indicate that user interactivity alone reduces nonprofessional investors’ satisfaction with digital annual reports, but the joint effect of user interactivity and graphical vividness overcomes this negative effect. These results have implications for designers of digital annual reports, investor groups consuming this information, and regulators concerned about the need for assurance on the (unregulated) non-financial disclosures in annual reports.
Essay 3 studies whether using hyperlinks that connect summarized financial graphs with detailed financial statement information reduces the effect of graphical distortions on nonprofessional investors’ perceptions of firm performance. Using 385 participants from M-Turk, I find that while distorted graphs do bias nonprofessional investors’ perceptions of firm performance, the provision and use of hyperlinks to the underlying source information eliminate those effects (i.e., debias). Using the dual-process theory of cognitive processing (Kahneman and Frederick 2002; Evans 2006, 2008), I find that hyperlinks enhance the overriding effect of System 2 processing (i.e., analytical processing) on System 1 processing (i.e., intuitive processing) and indirectly reduce the decision-biasing effect of distorted graphs on nonprofessional investors’ perceptions. The study contributes to standard setting as well as financial reporting practice by providing empirical evidence that the SEC’s policy guidance on implementing hyperlinks has benefits to nonprofessional investors. Second, it contributes to both the literature on distorted graphs and hyperlinks by suggesting hyperlinking to source data as a technique to mitigate the effects of graphical distortions.
The findings of the three essays have implications for the designers of digital annual reports, investor groups consuming this information, and regulators concerned about the need to standardize the presentation formats in digital annual reports and potentially require auditor oversight of graphical displays of both financial and non-financial data in these reports.
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Ragland, Linda Gale. "The Effects of Item Complexity and the Method Used to Present a Complex Item on the Face of a Financial Statement on Nonprofessional Investors` Judgments." Scholar Commons, 2011. http://scholarcommons.usf.edu/etd/3301.
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My study is motivated by standard setters interest in better understanding (and the gap in research as to) the effects of item complexity and disaggregation across a financial statement on users' decision processes (Bonner 2008; Glaum 2009; FASB 2010b). I examine whether complexity of an item and the method used to present the item on a financial statement influences nonprofessional investors' judgments. Specifically, I examine two issues raised concerning IAS 19 Employee Benefits. The first is to examine whether there are differences in nonprofessional investors' judgments when individual components of a complex item (defined pension cost) are disaggregated across a financial statement (the statement of comprehensive income) versus when individual components of a complex item are aggregated on the face of the same statement. Differences may arise since disaggregation across a statement provides information about how an item relates to different economic events and this information could help nonprofessional investors to better interpret and use the information in judgments. A second objective is to examine whether increasing the complexity of an already complex item affects the usefulness of information. I find that nonprofessional investors weigh higher levels of item complexity in certain judgments. Additionally, I find that when a complex item (defined pension cost) is disaggregated across a financial statement (the statement of comprehensive income) nonprofessional investors are able to acquire more information about the item and are able to more accurately understand the function of the item. This, in turn, helps the nonprofessional investors decide whether the information is useful in certain judgments.
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Tadesse, Amanuel Fekade. "Does the Format of Internal Control Disclosures Matter? An Experimental Investigation of Nonprofessional Investor Behavior." Scholar Commons, 2015. http://scholarcommons.usf.edu/etd/5780.
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This study investigates whether the current lack of structure of internal control weakness disclosures (a narrative about the reliability of the financial reporting system) leads nonprofessional investors to make differential investment decisions. Using the non-accelerated filer (smaller public company) setting, where nonprofessional investors are likely to consume unaudited internal control reports in their investing judgments and decisions, I examine two facets of internal control disclosure formats: presentation salience and disaggregation of material weaknesses. A 2 x 2 between-participants behavioral experiment was conducted with internal control presentation salience (bulleted vs. in-text) and disaggregation level (a single material weakness vs. a combination of multiple control deficiencies that is a material weakness). I find that nonprofessional investors reward companies that disclose internal control weaknesses more saliently. The results also indicate that disaggregation interacts with salience in that it increases the effect of salience on investing judgments such that salient (stealth) disclosure of a combination of control deficiencies is viewed more positively (negatively) than salient (stealth) disclosure of a material weakness. These findings are contrary to Rennekamp (2012) who finds that processing fluency in bad news leads to more negative investment judgements. Additional analyses indicated that the results related to management trust and credibility are consistent with prior literature. The findings contribute to academia and practice by shedding light on the importance that needs to be placed on the presentation format of internal control disclosures.
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Liou, Yu-Nung, and 劉瑀農. "Effects of Financial-Statement Presentation Format on Nonprofessional Investors’ Judgments：An Example of Comprehensive-Income." Thesis, 2004. http://ndltd.ncl.edu.tw/handle/24927092365158121912.
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碩士淡江大學
會計學系碩士班
94
There is no enough evidence whether the presentation formats of financial statement affect the judgment of nonprofessional investors in Taiwan. The foreign researches reach different conclusions varying with theories. SFAC No.34 has changed the classification of investments substantially, since it came into force at the beginning of 2006. Therefore, this study investigates whether it influences nonprofessional investors’ judgments if we present “unrealized holding gains and losses” of avalible-for-sale securities on a comprehensive-income statement or a stockholders’ equity statement. In addition, Maines and McDaniel(2000) proposed five dimensions that can influence nonprofessional investors’ weighting. This study will discuss immediately, and try to find out which one would affect nonprofessional investors’ judgment in Taiwan. First experiment find that alternative presentation formats has no significant effects on satisfaction of investors’ return but it has significant effects on risk-control ability and the risk of investing in the company’s stock. Moreover, when we present “unrealized holding gains and losses”on the comprehensive-income statements, nonprofessional investors become more sensitive to the volatility of “unrealized holding gains and losses”. Second experiment find that subjects’ different judgments on experiment are result from their unconcious errors. In addition, our research shows that “Placement in Financial Statements”, “Linkage to Net Income”, “Isolation” and “Aggregation” are the dimensions for different judgment mentioned above.
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Feng, Yi-Chia, and 馮怡嘉. "Effects of Taiwan’s SFAS No.34 on Nonprofessional Investors’ Judgments: An Example of Trading Securities." Thesis, 2004. http://ndltd.ncl.edu.tw/handle/64538651109316392141.
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碩士淡江大學
會計學系碩士班
94
According to Efficient Market Hypothesis, holding constant the available information and underlying economics, different presentations of financial information would not have an impact on investors’ judgments. However, many psychological researches result in adverse conclusions. Therefore, the objective of this research is to determine whether the presentations of financial information would have an impact on nonprofessional investors’ judgment, using Taiwan’s SFAC No.34 “Accounting for Financial Instruments.” First experiment uses a 2*2 between-subjects experiment to test on a pre-selected focus group, which consists of graduate accounting students, by giving them two different scenarios: (1) gain or loss on investments in securities rise as using Lower of Cost or Market Method whereas it fluctuates irregularly as using Fair Value Method; (2) gain or loss on investments in securities fluctuates irregularly as using Lower of Cost or Market Method whereas it rise as using Fair Value Method. Alternatively, the second experiment is a within-subjects design to investigate that it is conscious or unconscious bias behavior, if investors have different judgments on the same economic substance. The result of first experiment shows that the focus group simply fixated on reported income rather than the substance of the information. Thus, the first experiment concludes that alternative presentations of financial information do affect investors’ judgments. The second experiment shows that different presentations of financial information do not affect its readers in their investment judgments, when giving them the financial statement using Lower of Cost or Market Method and it using Fair Value Method meanwhile. Consequently, it is unconscious bias behavior that investors generally have different judgments on the same economic substance.
Books on the topic "Nonprofessional investors"
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Herrmann, Theresa. The Decision Usefulness of Additional Fair Value Disclosures: One Disclosure Type Does Not Fit All Nonprofessional Investors’ Needs. Springer Gabler, 2019.
Find full textBook chapters on the topic "Nonprofessional investors"
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Meng, Mao-ran, Li-xin Pan, and Ling-ling Tan. "Information Conflicts, Ambivalence, and the Judgment of Nonprofessional Investors." In Proceedings of the 22nd International Conference on Industrial Engineering and Engineering Management 2015, 519–29. Paris: Atlantis Press, 2016. http://dx.doi.org/10.2991/978-94-6239-177-2_53.
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Cleaveland, M. Catherine, Lynn Comer Jones, and Kathryn K. Epps. "Nonprofessional Investors’ Perceptions of Real-time Corporate Tax Audits." In Advances in Taxation, 81–97. Emerald Publishing Limited, 2019. http://dx.doi.org/10.1108/s1058-749720190000026005.
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Fortin, Anne, and Sylvie Berthelot. "MD&A Risk Disclosures and Nonprofessional Investors' Perceptions and Investment Decisions." In Advances in Accounting Behavioral Research, 1–28. Emerald Group Publishing Limited, 2012. http://dx.doi.org/10.1108/s1475-1488(2012)0000015005.
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Walton, Stephanie, and Michael Killey. "The Impact of Country-by-Country Reporting on Nonprofessional Investor Judgments." In Advances in Taxation, 159–95. Emerald Publishing Limited, 2020. http://dx.doi.org/10.1108/s1058-749720200000027006.
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