In Country A, GAAP requires releasing complete information about a firm's planned investment projects. Country B has a similar GAAP, Except that it does not require the release of any information about planned investment projects. You have just conducted a detailed comparative statistical analysis of security price response to GAAP information. You have found that the earnings response coefficients (ERCs) are positive in both countries but higher in Country A than in Country B. Which of the following statements best follows from this finding? 

 

1. Information about planned investment projects is decision-useful and socially valuable.?
2. Information about planned investment projects is decision-useful but not necessarily socially valuable. ?
3. Information about planned investment projects is socially valuable but not necessarily decision-useful. ?
4. No conclusions can be drawn from the information given. ?

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