Research concerned with the relation of accounting numbers and stock prices covers
decades. In this brief review we summarize recent research with study designs and research
methods similar to ours. We see two principal strains: first, research focused on explaining
Accounting Practices and the Market Valuation of Accounting Numbers 447
stock prices with accounting book value and earnings; and second, research examining the
incremental explanatory power of book value and earnings in the presence of the other.