TQ.3

Please read the extract from Wyatt (1983). (Refer to pages 4-6 of this topic guide.)

Professor Wyatt describes a series of transactions that he argues question the linkbetween the implications of the EMH and "the real world of accounting". He claimshis evidence shows that managers don't behave as if they believed in stock market efficiency. The extract relates to his comments on off-balance sheet financing. He provides an example of the practice of using lease financing, which enables the assets and related liabilities to be off-balance sheet and makes some assumptions about the reasons for and implications of these practices.

Required

What reasons does Wyatt give in arguing thatthe EMH does not reflect the "realworld of accounting"?