This study examined the role of positive and negative discretionary accrual management in the stock price impact. A sample of 66 firms listed in Tehran Stock Exchange was selected for a ten-year period (2008-2017). Accrual management was found to lead to significant changes in stock prices, and uninformed investors incur trading costs caused by the stock price impact. The results showed two key...

Using a large sample of Chinese listed companies during period from 2005 to 2014, this paper investigates whether the managerial characteristics of Chairman affect earnings management. Using McNichols [1] accrual-based and Roychowdhury [2] real earning management, we find that companies with female, long-tenured, older and more educated Chairman have lower absolute discretionary accruals and lo...

We propose market timing strategies aiming to exploit the aggregate accruals’ return forecasting power. We examine several performance metrics of the aggregate accruals based market timing strategy such as excess portfolio return, Sharpe ratio, and Jensen’s alpha. We provide robust evidence that, relative to the passive investment strategy of buying and holding the stock market, the market timi...

We test the effect of audit effort on earnings management using a unique database of hours worked by auditors on 9,738 audits in Greece between 1994 and 2002. When audit hours are lower, (1) abnormal accruals are more often positive than negative, (2) positive abnormal accruals are larger, and (3) companies are more likely to manage earnings upwards in order to meet or beat the zero earnings be...

Earnings management is an important part of current accounting studies. Many of those studies concentrate on accruals. This study critically evaluates frequently used accrual models. The Jones model was the first econometric approach to estimating discretionary accruals. Even though it is subject to several limitations, such as model misspecification, omitted-variables, and errors-in-variables ...

This paper studies how a client's bankruptcy risk, together with its accounting quality and corporate governance, affect audit pricing. We use the unusual economic conditions of the 1998 Asian financial crisis as a stress test of the effect of these factors on audit pricing in Hong Kong. We find that audit fees are highly sensitive to a client firm's financial condition, corporate governance, a...

We identify clawback triggers from firms’ proxy statements (Form DEF 14A) and use the likelihood of restatements to proxy for financial reporting quality. Based on a sample of 578 U.S. firms that voluntarily adopt clawback provisions during 2003-2009, when restatement-based triggers could be decomposed into two types: fraud and unintentional error, and we do observe the evidence that using frau...

The primary objective of this study is to examine the association between the quality of mandatory earnings forecast, measured by forecast accuracy and bias, and the ownership structure of Taiwanese firms, measured by the divergence between the ultimate owner’s control and the equity ownership level. The study is based on 528 forecasts issued by Taiwanese listed firms from 1999 to 2001 which we...

PURPOSE Postactivation barriers to oncology clinical trial accruals are well documented; however, potential barriers prior to trial opening are not. We investigate one such barrier: trial development time. EXPERIMENTAL DESIGN National Cancer Institute Cancer Therapy Evaluation Program (CTEP)-sponsored trials for all therapeutic, nonpediatric phase I, I/II, II, and III studies activated betwee...