We extend the analysis in Sloan (1996) to identify the source of information in accruals about earnings quality. Our results indicate that information in accruals about earnings quality is not limited to the current accruals analyzed by Sloan, but extends to non-current accruals. We also show that while information in accruals originates almost exclusively from asset accruals, liability accrual...

We extend Dechow and Dichev’s [2002] model of current accruals quality (CAQ) to consider total accruals quality (TAQ). While the two measures are conceptually similar (both reflect the standard deviation of the residuals from the mapping of accruals into lead and lag cash flows), they differ in terms of the definitions of accruals and cash flows as well as the number of lead and lag cash flow t...

The accruals anomaly, demonstrated by Sloan (1996), generated significant excess returns consistently for over four decades until 2002. Since then, the accruals anomaly has apparently disappeared. In this paper, I argue that one factor responsible for this decline is the increasing incidence of analysts’ cash flow forecasts which has provided markets with information about likely future accrual...

This paper examines how commonly used earnings quality measures fulfill a key objective of financial reporting, i.e., improving decision usefulness for investors. We propose a stock-price-based measure for assessing the quality of earnings quality measures. We predict that firms with higher earnings quality will be less mispriced than other firms. Mispricing is measured by the difference of the...

in this research, role of accruals in elaboration of quality of earning of the companies accepted in mumbai stock exchange has been studied and relationship between quality of earning through accruals and its constituents and abnormal stock return has been studied. the studied sample includes 35 companies in group a of mumbai stock exchange in 2009-2013.fordata analysisandhypothesistesting mult...

In this research, the relationship between accruals quality and bankruptcy of companies has been studied. According to Dechow et al.chr('39')s (1995) model, the quality of accruals was measured, and according to the Shirata model (1998), bankruptcy was examined. Operations were considered as the control variables. The research hypothesis was tested using a multivariate regression model and a co...

SYNOPSIS: Earnings management remains a popular topic of debate and discussion among investors, regulators, analysts, and the public. One mechanism that might mitigate earnings management is auditors’ industry expertise. Using a large sample of clients of Big 6 auditors, this research examines the association between auditor industry expertise, measured in terms of both auditor market share in ...

We investigate whether investors price accruals quality, our proxy for the information risk associated with earnings. Measuring accruals quality (AQ) as the standard deviation of residuals from regressions relating current accruals to cash flows, we find that poorer AQ is associated with larger costs of debt and equity. This result is consistent across several alternative specifications of the ...

In this research, role of accruals in elaboration of quality of earning of the companies accepted in Mumbai Stock Exchange has been studied and relationship between quality of earning through accruals and its constituents and abnormal stock return has been studied. The studied sample includes 35 companies in group A of Mumbai Stock Exchange in 2009-2013.Fordata analysisandhypothesistesting mult...

the current study aims to investigate the relationship between stock liquidity risk and financial information quality criteria (i.e. the timely dividends announcement, accruals quality and the percentage of profitability prediction error) of companies listed on the tehran stock exchange. for this purpose, 148 cases of data from listed companies, collected from 2007 to 2012, were employed in ord...