Interpreting accruals as working capital investment, we hypothesize that firms rationally adjust their investment to respond to discount rate changes. Consistent with the optimal investment hypothesis, we document that (i) the predictive power of accruals for future stock returns increases with the covariations of accruals with past and current stock returns, and (ii) adding investmentbased fac...

Purpose This study examines whether Brazilian health insurance companies (HICs) engage in earnings management through discretionary accruals or operational decisions by refraining from reporting a low indicator of sustainability the market (IDSM). Design/methodology/approach The used Jones and Modified models to identify model described Roychowdhury estimate abnormal behaviors decisions. Data c...

This paper provides empirical evidence on whether the earnings fixation hypothesis can explain the accrual anomaly originally documented in Sloan (1996). Our analytical model yields the prediction that if investors fixate on reported earnings, the effectiveness of the accrual strategy will increase in the responsiveness of the stock price to earnings and the differential persistence of cash flo...

This study aims to examine the quality of accrual having economic consequences in predicting future cash flows manufacturing companies listed on Indonesia Stock Exchange (IDX) for 2017-2019 period. The population this were all (IDX), research sample was determineted using pusposive sampling method with a total 213 companies. data used is secondary from company’s annual report. analytical i mult...