the main purpose of current research is to determine the effect of financial crisis on earnings quality. in this study, earnings quality was measured by using three earnings persistence, earnings predictability and accruals quality. the measure of financial crisis in a company is to have at least one of three criteria: three consecutive years of losses (operating loss, net loss or retained), re...

This study focuses on the market reaction to information transfers from economically linked customers. I examine whether investors have limited attention with respect to the information contained in customer earnings announcements for suppliers. Using 1083 unique customer–supplier relationships for the period 1983–2011, I find that the cumulative abnormal returns of a supplier surrounding and f...

Investors and other contributors to stock exchange need a variety of tools, measures, and information in order to make decisions. One of the most common tools and criteria of decision makers is price-to earnings per share ratio. As a result, investors are in pursuit of ways to have a better assessment and forecast of price and dividends and get the highest returns on their investment. Previous ...

Predictability and variability are two measures commonly used in the empirical literature to gauge the quality of earnings and hence, decision usefulness to investors. We adopt both measures to investigate empirically the relative quality of Stern Stewart’s measure of economic value added (EVA) compared to GAAP earnings, residual income, cash flows and other mandated metrics in the US and UK. W...

In this paper, we examine the predictability of the cross-section of bank stock returns by taking advantage of the unique set of industry characteristics that prevail in the financial services sector. We examine predictability in the cross-section of bank stock returns using information contained in individual bank fundamental variables such as income from derivative usage, previous loan commit...

Using an earnings management model in which managers can manipulate the earnings announcement when the firm’s internal control system fails, this paper proposes a measure of earnings quality, based on Ganuza and Penalva’s (2010) notion of integral precision that can be estimated using either the time series of earnings or the relation between earnings and prices. I show that large scale frauds ...

Ang, Hodrick, Xing, and Zhang (2006, 2009) document a puzzling negative relation between idiosyncratic volatility and cross-section of stock returns. This paper examines whether this idiosyncratic volatility discount is related to earnings shocks, and finds that a substantial portion of the idiosyncratic volatility discount can be explained by earnings momentum and post-formation earnings shock...

The relative predictability of returns and dividends is a central issue because it forms the paradigm to interpret asset price variation. A little studied question is how dividend smoothing, as a choice of corporate policy, affects predictability. We show that even if dividends are supposed to be predictable without smoothing, dividend smoothing can bury this predictability. Because aggregate d...