Abstract According to the Efficient Market Theory, it should be extremely difficult for an investor to develop a "system" that consistently selects stocks that exhibit higher than normal returns over a period of time. It should also not be possible for a company to "cook the books" to misrepresent the value of stocks and bonds. An analysis of current literature, however, indicates that companies can and do "beat the system" and manipulate information to make …showed first 75 words of 543 total…

…showed last 75 words of 543 total…a result, AOL’s stock is currently listed at 35 ¼, down from a high of 71 in May. This example clearly outlines a major flaw in Efficient Market Theory: If EMT relies heavily on information as the basis for determining market value, what happens if the information is manipulated? As a counterpoint, the clear assertion in the Newsweek article is that most normal companies do not use such accounting practices, however legal, to falsely report superior performance.