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dc.contributor.authorMisund, Bård
dc.date.accessioned2018-01-04T12:24:55Z
dc.date.available2018-01-04T12:24:55Z
dc.date.created2017-11-24T15:53:49Z
dc.date.issued2017-11
dc.identifier.citationMisund, B. (2017) Accounting Method Choice and Market Valuation in the Extractive Industries. Cogent Economics & Finance, 5: 1408944nb_NO
dc.identifier.issn2332-2039
dc.identifier.urihttp://hdl.handle.net/11250/2475671
dc.description.abstractFor more than 40 years, oil and gas companies have been able to choose between two competing methods for accounting for exploration activities. The implication is that two otherwise identical companies can report substantially different earnings depending on chosen method. This situation, where oil and gas company managers have discretion to choose between different accounting methods, has transpired because of intense lobbyism towards accounting standard setters by oil and gas companies in favour of one of the methods. The existence of two accounting methods is concerning since investors will struggle to uncover the true underlying performance of oil and gas companies. We conjecture that investors will resort to operating cash flows to evaluate oil company financial performance since cash flows are less affected by managers’ discretion than earnings are. In this study, we investigate the relevance to investors of earnings versus cash flow for oil and gas companies. Our results show that cash flow measures, but not earnings, are significantly associated with oil company returns. These findings suggest that the financial markets lack confidence in oil company earnings, irrespective of accounting method used, and investors therefore prefer cash flows as measures of underlying financial performance.nb_NO
dc.language.isoengnb_NO
dc.publisherCogent OAnb_NO
dc.relation.urihttp://www.tandfonline.com/doi/pdf/10.1080/23322039.2017.1408944
dc.rightsNavngivelse 4.0 Internasjonal*
dc.rights.urihttp://creativecommons.org/licenses/by/4.0/deed.no*
dc.subjectøkonominb_NO
dc.subjectfinansnb_NO
dc.subjectpetroleumsindustriennb_NO
dc.subjectpetroleum industrynb_NO
dc.subjectoljeprisernb_NO
dc.subjectgassprisernb_NO
dc.subjectprofitabilitynb_NO
dc.subjectoil company valuationnb_NO
dc.titleAccounting Method Choice and Market Valuation in the Extractive Industriesnb_NO
dc.typeJournal articlenb_NO
dc.typePeer reviewednb_NO
dc.description.versionpublishedVersionnb_NO
dc.rights.holder© 2017 The Authornb_NO
dc.subject.nsiVDP::Samfunnsvitenskap: 200::Økonomi: 210::Bedriftsøkonomi: 213nb_NO
dc.source.volume5nb_NO
dc.source.journalCogent Economics & Financenb_NO
dc.source.issue1408944nb_NO
dc.identifier.doi10.1080/23322039.2017.1408944
dc.identifier.cristin1518246
dc.relation.projectNorges forskningsråd: 237674nb_NO
cristin.unitcode217,14,0,0
cristin.unitnameHandelshøgskolen ved UiS
cristin.ispublishedtrue
cristin.fulltextoriginal
cristin.qualitycode1


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