Financial Accounting Blog

Monday, April 12, 2004

Risk and Stock Prices. reports that Goodyear's stock price rose on news that they concluded an accounting probe. The probe lowered previously reported earnings by about $65 million. Perhaps concluding the investigation has reduced the risk associated with the stock---helping the stock price.
The last leg of the probe found $10 million in overstatements related to the company's overseas operations. Other downward adjustments include $20 million related to workers' compensation claims, $10 million for fixed assets, $8 million for product liability, $7 million for intercompany profit elimination and $10 million for other items.