Academic journal article Journal of Accountancy

Although Investors Are Less Confident in U.S. Capital Markets Than They Were a Year Ago, 70% or More Continue to Voice Confidence in the Markets and U.S. Companies in General, as Well as in Audited Financial Statements, According to the Center for Audit Quality's Second Annual Survey of Investors

Academic journal article Journal of Accountancy

Although Investors Are Less Confident in U.S. Capital Markets Than They Were a Year Ago, 70% or More Continue to Voice Confidence in the Markets and U.S. Companies in General, as Well as in Audited Financial Statements, According to the Center for Audit Quality's Second Annual Survey of Investors

Article excerpt

Although investors are less confident in U.S. capital markets than they were a year ago, 70% or more continue to voice confidence in the markets and U.S. companies in general, as well as in audited financial statements, according to the Center for Audit Quality's second annual survey of investors.

Seventy percent of investors who were surveyed between July 10 and July 20 expressed confidence in U.S. capital markets, down from 84% in July 2007. Rising gas and oil prices, the weakness of the dollar and the home foreclosure crisis were the top reasons for their reduced faith. Public confidence in audited financial statements was 73%--down from 80% a year ago.

A larger number of investors now describe themselves as "inexperienced" investors, with a corresponding increase in reliance on a broker or money manager. Eleven percent of investors say they have diversified their portfolios. The survey also found that nearly half of investors (45%) read companies' financial reports "very" or "somewhat" often, but that many find the reports hard to use. Respondents voiced strong support (72%) for the design of a more user-friendly way of accessing and reading financial reports.

The relevance of financial reporting was the dominant theme of the CAQ's recently concluded Public Dialogue Tour, according to CAQ Executive Director Cindy Fornelli. …

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