Date of Award
5-1-2026
Document Type
Dissertation
Degree Name
Ph.D. in Accountancy
First Advisor
Brett Cantrell
Second Advisor
Rachna Prakash
Third Advisor
Millie Hutton
School
University of Mississippi
Relational Format
dissertation/thesis
Abstract
Retail trading is experiencing remarkable growth amongst the current capital markets driven by many advancements such as commission free trading, fintech applications, and fractional share trading. Prior literature documents differing opinions on the capabilities of retail traders, often describing these traders as noise or attention-based traders. Whether these investors trade on complex accounting information remains an empirical question. In this study, I investigate whether retail investors respond to and incorporate accounting disclosures in their trading decisions by examining financial restatements, going concern opinions, and material weakness disclosures. I analyze retail activity using the quote midpoint method and fractional share trades. I find that retail investors significantly increase trading around going concern and material weakness disclosures, while financial restatements do not elicit strong reactions. These findings suggest that retail investors actively trade around firms issuing complex accounting disclosures, highlighting the role of retail participation during these disclosure periods. This study contributes to the accounting and finance literature around retail trading and offers insights to regulators who emphasize the importance of high quality risk disclosures in maintaining the reliability of the capital markets.
Recommended Citation
Oakes, Matthew, "Retail Investor Responses to Accounting Disclosures Using Trade-Level Evidence" (2026). Electronic Theses and Dissertations. 8858.
https://egrove.olemiss.edu/etd/8858