The following is an actual headline that was recently reported in the media about the New...

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Accounting

The following is an actual headline that was recently reportedin the media about the New Zealand company Sky TV:
“Sky TV’s profit dropped 20.9 per cent in the year to the end ofJune. The pay TV company released its full-year results today,which showed a net profit of more than $116.3 million, down from$147.1 million the previous year.”
(a). Discuss the key findings of the Ball and Brown(1968) study and explain how the above earnings announcement mightaffect Sky TV’s share price.

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AN EMPIRICAL EVALUATION OF ACCOUNTING INCOME NUMBERS Published by BALL AND BROWN 1968 KEY FINDINGS Previous to Ball and Brown 1968 study share prices not effected by accounting income numbers had any value and accounted differently by different companies and considered useless to determine share prices companies These assumptions are not verified by actual data of real world observations In 1968 Ray JBall and PBrown published AN EMPIRICAL EVALUATION OF ACCOUNTING INCOME NUMBERSJOURNAL OF ACCOUNTING RESEARCHAUTUMN 1968 changed the way of conductingthe research in accounting Ball and brown questioned the uselessness of accounting income numbers by performing an empirical test on relation between Accounting income numbers and Share prices What Ball and brown studied is if accounting See Answer

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