| Abstract [eng] |
68 pages, 6 pictures, 9 tables, 80 references. The publication of financial statements is one of the most significant informational events in capital markets. Therefore, the main objective of this paper is to analyze how the publication of audited and unaudited financial statements affects stock price changes on the Nasdaq Baltic exchange. The paper consists of three main chapters: a review of the scientific literature, the research methodology, and the research results. The first chapter based on an analysis of the scientific literature examines the significance of financial information in capital markets, the role of auditing as a mechanism for ensuring the reliability of financial information and the theoretical foundations of stock price reactions to the publication of financial information. It also covers the efficient market hypothesis, the problem of information asymmetry and the specific characteristics of small and developing capital markets, among which the Nasdaq Baltic exchange is included. The second chapter describes the event study methodology, the principles of sample formation, the rationale for the selection of event windows, and the criteria for assessing statistical significance. The third chapter presents the results of the empirical research and its comparison with the scientific literature. The conclusions and recommendations summarise the results of both the theoretical and empirical parts of the paper. Results of the study show that publication of audited financial statements on the Nasdaq Baltic exchange generates a statistically significant positive market reaction, whereas the publication of unaudited financial statements does not produce a statistically significant effect on stock prices. An additional country-level analysis revealed that the strength of the market reaction differs among Estonian, Latvian, and Lithuanian companies and that audit status reinforces the credibility of the signals conveyed in financial statements. |
