The efficient market hypothesis states that the stock market reflects all known information by quickly processing and assimilating new data via the mechanism of buying and selling. Moreover, the stock market is forward-looking, explaining why a company's stock price may fall even if earnings improve from the previous quarter. In order to increase their market capitalization, large companies outperform market expectations for earnings. In order to artificially boost their stock prices, they manipulate their earnings reports frequently to meet or exceed estimates. In other words, the Securities and Exchange Commission (SEC) pays a lot of attention to how companies manage their earnings.