Does the Disclosure of Financial Statements Submitted to Tax Office of Real Estate Investment Trusts Create a Misleading Impact on the Market?

Abstract In this study, it has been empirically tested whether the disclosure of the financial statements submitted to tax offices by the Real Estate Investment Trusts (REITs) listed on Borsa ？stanbul according to the Tax Procedural Code has led to misleading impact on the market and investor decisions. For this purpose, 64 financial statement disclosures regarding the years of 2017 and 2018 were included in the study and analyzed by the Event Study method. According to the results of the study, firstly, it has been found that tax based financial statements disclosures have statistically significant impact on stock returns and investor’s investment decisions. Secondly, when the impact of the tax based financial statements disclosures and the impact of the IFRS based financial statements disclosures were compared; it has been seen that the effects of two different financial statements disclosures were opposite direction and that these opposite effects were statistically significant from the date of disclosure to the following forth transaction day. These findings support the hypothesis that the disclosure of tax based financial statements before the IFRS based financial statements creates a misleading impact on the market during the period between the disclosures of the two financial statements