The case of VIP Scandinavia

Abstract

This article analyses the stock market's reaction to news about the Norwegian company VIP Scandinavia over a period of about a year and a half. The data show that the market relied to a great extent upon financial reporting as a source of valuation information. A tentative attempt is made to explain this finding in the light of earlier capital market research. VIP Scandinavia has been accused of publishing fraudulent financial statements. The article also discusses whether empirical results of the kind presented here, may be used as evidence of the harm caused by misleading financial statements.Financial accounting Financial fraud Stock markets