Sorry you subject you all to more accounting horrors, but here are three of the theories underlying a series of papers labeled the 'anomaly' papers which I'm going to have a crack at trying to disprove.

Accrual Anomaly (AA):
Current level of accruals is negatively related to abnormal returns over the following year.
Therefore market fails to appreciate accrual component of earnings is less persistent than the cashflow component.
Consequently, market appears to overreact to earnings that contain a large accrual component.

Post-earnings announcement drift anomaly (PEAD):
Stock prices continue to drift in the direction of the initial price response to an earnings announcement (for up to 120 days).
Therefore market fails to fully appreciate and price the future earnings implications of current earnings surprises.

Income smoothing hypotheses:
When faced with the prospect of reporting exceptionally high (low) earnings, managers are likely to use income decreasing (increasing) accruals to reduce the magnitude of the earnings surprise.
In this circumstance, AA would be predicted to increase the PEAD:
Firms with large negative (positive) earnings surprises would be predicted to experience large negative (positive) abnormal returns, as would firms with large positive (negative) accruals.