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Journal articles on the topic 'Accruals'

Author: Grafiati

Published: 4 June 2021

Last updated: 25 July 2025

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1

Martias, Andi. "ANALISA PENGARUH FREE CASH FLOW, AUDIT INTERNAL, LIKUIDITAS, LEVERAGE DENGAN DISCREATIONARY ACCRUAL Pada PT. ALSY." Jurnal Perspektif 18, no. 1 (2020): 45–53. http://dx.doi.org/10.31294/jp.v18i1.7195.

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Abstract - Discreationary accruals as a representative in earnings management calculation parameters. The theory in which calculated by excluding total accruals with non-discreationary accruals. This model uses Total Accrual (TA) which is classified into discreationary accrual (DA) and non discreationary accrual (NDA). This research process aims to determine the process of managing management responsibilities for financial reporting for shareholders there is no miss information. The earnings management method is part of the accounting method used in financial reporting for investors.The analys

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Zhang, X. Frank. "Accruals, Investment, and the Accrual Anomaly." Accounting Review 82, no. 5 (2007): 1333–63. http://dx.doi.org/10.2308/accr.2007.82.5.1333.

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This paper investigates two competing hypotheses for the accrual anomaly: investment/growth and persistence. Both investment/growth and persistence information in accruals are likely to vary cross-sectionally, depending on a firm's business model, a fact that generates different cross-sectional implications for the accrual anomaly. I find that the magnitude of the accrual anomaly monotonically increases with the investment information contained in accruals, as measured by the co-variation between accruals and employee growth. In industries/firms in which accruals co-vary with employee growth,

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Hafzalla, Nader, Russell Lundholm, and E. Matthew Van Winkle. "Percent Accruals." Accounting Review 86, no. 1 (2011): 209–36. http://dx.doi.org/10.2308/accr.00000011.

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ABSTRACT: We document how the effectiveness of an accruals-based trading strategy changes with the benchmark used to identify an extreme accrual. We measure “percent accruals” as accruals scaled by earnings, rather than total assets, and show that this seemingly small change produces a radically different sort of the data. We find that a trading strategy based on percent accruals yields significantly larger annual hedge returns than the traditional accruals measure, and does so mostly by improving the long position in low-accrual stocks. The hedge returns are also significant in all but the lo

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Izadi Zadeh Darjezi, Javad. "The role of accrual estimation errors to determine accrual and earnings quality." International Journal of Accounting & Information Management 24, no. 2 (2016): 98–115. http://dx.doi.org/10.1108/ijaim-04-2015-0022.

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Purpose Managers, investors and security analysts all pay special attention to the bottom line of income statements and they miss significant information included in accruals about the quality of earnings. A considerable portion of the earnings-quality literature examines the possibility of using the accruals to shift reported income among fiscal periods. One of the main roles of working-capital accruals is to adjust the recognition of cash flows. This paper aims to focus on earnings quality by examining the working-capital accruals quality using the method of Dechow and Dichev (2002). Design/

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Canitz, Felix, Christian Fieberg, Kerstin Lopatta, Thorsten Poddig, and Thomas Walker. "Revisiting the (mis)pricing of the accrual anomaly." Journal of Risk Finance 19, no. 3 (2018): 210–24. http://dx.doi.org/10.1108/jrf-12-2016-0154.

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Purpose This paper aims to hunt for the driving force behind the accrual anomaly and revisit the risk versus mispricing debate. Design/methodology/approach In sorts of stock returns on abnormal and normal accruals, the authors find that abnormal accruals are the driving force behind the accrual anomaly. The authors then construct characteristic-balanced portfolios from dependent sorts of stock returns on the abnormal accrual characteristic and a related factor-mimicking portfolio to test whether the accrual anomaly is due to risk or mispricing (Daniel and Titman, 1997; Davis et al., 2000). Fin

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Krishnan, Gopal V. "Audit Quality and the Pricing of Discretionary Accruals." AUDITING: A Journal of Practice & Theory 22, no. 1 (2003): 109–26. http://dx.doi.org/10.2308/aud.2003.22.1.109.

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Accrual-based earnings is considered superior to cash flows. Accruals allow managers to communicate their private and inside information and thereby improve the ability of earnings to reflect underlying economic value. However, managers could engage in aggressive reporting of accruals that would seriously undermine the informativeness of reported earnings. Since outsiders cannot directly observe earnings, high-accrual firms face greater agency costs relative to low-accrual firms. Auditing plays an important role in mitigating these agency costs by constraining opportunistic management of accru

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Dechow, Patricia M., and Ilia D. Dichev. "The Quality of Accruals and Earnings: The Role of Accrual Estimation Errors." Accounting Review 77, s-1 (2002): 35–59. http://dx.doi.org/10.2308/accr.2002.77.s-1.35.

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This paper suggests a new measure of one aspect of the quality of working capital accruals and earnings. One role of accruals is to shift or adjust the recognition of cash flows over time so that the adjusted numbers (earnings) better measure firm performance. However, accruals require assumptions and estimates of future cash flows. We argue that the quality of accruals and earnings is decreasing in the magnitude of estimation error in accruals. We derive an empirical measure of accrual quality as the residuals from firm-specific regressions of changes in working capital on past, present, and

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Nurmayanti, Poppy. "Karakteristik Chief Executive Officer (CEO) dan Kualitas Akrual: Bukti Empiris dari Indonesia." Jurnal Akuntansi dan Governance Andalas 3, no. 1 (2020): 1–29. http://dx.doi.org/10.25077/jaga.v3i1.42.

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This study investigates the relationship between CEO characteristics and accruals quality from public firms listed in Indonesia Stock Exchange between 2010 and 2017. This study used two accruals quality measures namely absolute abnormal accruals and performance matched abnormal accruals. Specifically, absolute abnormal accruals are proxied by two proxies, a) the modified Jones model (Dechow et al. 1995) and b) accrual estimation error the augmented specification of Dechow and Dichev model (2002) as suggested by McNichols (2002). Furthermore, performance matched abnormal accruals are proxies by

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Nabosu, Simon Sokorte, and Esther Nkatha M’ithiria. "The Role of Accruals Anomaly on Stock Market Return of Non-Financial Firms Listed on the Nairobi Securities Exchange." Journal of Finance and Accounting 6, no. 3 (2022): 82–96. http://dx.doi.org/10.53819/81018102t2082.

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The accrual anomaly arises due to the market mispricing of the total accruals and their components and the investors fail to incorporate the differential persistence of the cash flow components and accruals of firm earnings. This study sought to determine the effect of accruals anomaly on stock market return of non-financial firms listed on the Nairobi Securities Exchange. The study adopted positivism as data collection and hypothesis development and testing was achieved. The study used quantitative research design to correlate study variables using mathematical analysis methods. Correlation r

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Ashbaugh-Skaife, Hollis, Daniel W. Collins, William R. Kinney, and Ryan LaFond. "The Effect of SOX Internal Control Deficiencies and Their Remediation on Accrual Quality." Accounting Review 83, no. 1 (2008): 217–50. http://dx.doi.org/10.2308/accr.2008.83.1.217.

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This paper investigates the effect of internal control deficiencies and their remediation on accrual quality. We first document that firms reporting internal control deficiencies have lower quality accruals as measured by accrual noise and absolute abnormal accruals relative to firms not reporting internal control problems. Second, we find that firms that report internal control deficiencies have significantly larger positive and larger negative abnormal accruals relative to control firms. This finding suggests internal control weaknesses are more likely to lead to unintentional errors that ad

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Frankel, Richard M., and Yan Sun. "Predicting Accruals Based on Cash-Flow Properties." Accounting Review 93, no. 5 (2018): 165–86. http://dx.doi.org/10.2308/accr-52001.

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ABSTRACT Our goal is to understand the extent to which cash-flow properties explain accruals. Using the Dechow, Kothari, and Watts (1998) model, we derive a negative relation between accruals and cash-flow changes, and show that the strength of the relation is linked to negative serial correlation in cash-flow changes. Dechow et al. (1998) also suggest that the strength of the relation between accruals and revenue changes relates to operating cycle length. Prior accrual models have not incorporated these theoretical relations. We show that incorporating cash-flow changes, serial correlation in

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Sun, Lan. "Accrual mispricing in the era of corporate governance reforms." Asian Review of Accounting 28, no. 3 (2020): 373–94. http://dx.doi.org/10.1108/ara-08-2019-0143.

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PurposeThis study is primarily motivated by the increasing concern of the academic, practitioners, regulators and standard setters regarding the quality of earnings and financial reporting. The purpose is to investigate whether the accrual anomaly exists in Australia; whether the occurrence of the accrual anomaly is attributed to the discretionary accruals component stemming from managerial discretion; and the impact of corporate governance reforms on accrual mispricing.Design/methodology/approachThis study employs the Mishkin (1983) rational expectations test to examine whether the earnings e

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A. Papanastasopoulos, Georgios, Andreas I. Tsalas, and Dimitrios D. Thomakos. "The accrual anomaly in the Greek stock market." Investment Management and Financial Innovations 13, no. 2 (2016): 322–33. http://dx.doi.org/10.21511/imfi.13(2-2).2016.07.

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The authors examine the negative relation of traditional accruals and % accruals with future returns in the Greek stock market. Positive abnormal returns from hedge portfolios on both accrual measures summarize the economic significance of this negative relation. The magnitude of returns obtained from traditional accruals is higher than that obtained from % accruals, contrary to existing evidence from the U.S. capital market. The analysis suggests that the accrual anomaly appears to be present in the Greek stock market: this has macroeconomic implications because firms with low reported accrua

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Addonizio, Joanna, Alex Post, Matthew Rice, et al. "Novel use of clinical pathways to improve clinical trial accrual." JCO Oncology Practice 20, no. 10_suppl (2024): 414. http://dx.doi.org/10.1200/op.2024.20.10_suppl.414.

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414 Background: Fewer than 10% of adult cancer patients participate in clinical trials. Clinical pathways platforms have traditionally sought to improve trial accrual by displaying available trials for eligible patients. Our team explored how Pathways navigation data can also be used to identify eligible patients of poorly accruing trials and provide study investigators with a near real-time data feed of those patients. Methods: Providers at Dana-Farber Cancer Institute are asked to navigate the pathways decision-support platform and order systemic cancer therapies 7 days in advance of adminis

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Beneish, Messod D., and Mark E. Vargus. "Insider Trading, Earnings Quality, and Accrual Mispricing." Accounting Review 77, no. 4 (2002): 755–91. http://dx.doi.org/10.2308/accr.2002.77.4.755.

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This paper investigates whether insider trading is informative about earnings quality and the valuation implications of accruals. We show that (1) the one-year-ahead persistence of income-increasing accruals is significantly lower when accompanied by abnormal insider selling and greater when accompanied by abnormal insider buying; (2) the accrual mispricing phenomenon observed in previous work (e.g., Sloan 1996) is due to the mispricing of income-increasing accruals; (3) one-year-ahead hedge returns to trading strategies based on the direction of accruals and insider trading significantly exce

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Nugroho, Bayu Adi, and Jasman Jasman. "Can Managers Use Accruals Quality for Creating Investment Opportunity Set and Increasing Firm Value?" Binus Business Review 9, no. 3 (2018): 235–45. http://dx.doi.org/10.21512/bbr.v9i3.4891.

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There were two main objectives of this research. Firstly, the researchers analyzed the impact of accruals quality and debt on firm value. Secondly, the researchers studied whether managers of a highly leveraged firm could use discretionary accruals for Investment Opportunity Set (IOS). The sample consisted of Indonesian manufacturing firms listed from 2013 to 2016. The researchers utilized Generalized Method of Moments (GMM) method and purposive sampling. The researchers find that accruals quality positively affects firm value. The results also suggestthat there are differences in accruals qua

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Owens, Edward L., Joanna Shuang Wu, and Jerold Zimmerman. "Idiosyncratic Shocks to Firm Underlying Economics and Abnormal Accruals." Accounting Review 92, no. 2 (2016): 183–219. http://dx.doi.org/10.2308/accr-51523.

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ABSTRACT Economics challenge the specification of discretionary accrual models. Since rent-seeking firms pursue differentiated business strategies, firms in the same industry experience idiosyncratic shocks due to heterogeneous economic fundamentals and hence have different accrual-generating processes. We present evidence that idiosyncratic shocks are widespread, propagate through multiple years of financial statements, and reduce accrual models' goodness of fit. This not only affects abnormal accrual estimates for the firm experiencing shocks, but also affects measurement of abnormal accrual

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Mulyono, Kasmawati Erlinda N. G., and Umi Murtini. "PENGARUH PERUBAHAN UNDAI\G-I.JNDAIIG PERPAJAKAN NOMOR 17 TAHUN 2OOO TERHADAP MANAJEMEN LABA." Jurnal Riset Akuntansi dan Keuangan 5, no. 2 (2009): 1. http://dx.doi.org/10.21460/jrak.2009.52.154.

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Penelitian ini bertujuan menguji penganth perabahan undang-undang perpajakan nomor 17 tahun 2000 terhadap manajemen laba. Penelitian ini menggunakan 131 perusahaan manufaktur yang listing di Bursa Efek Indonesia (BEI). Periode penelitianadaloh tahun 2000 dan 2001. Yariobel yang digunakan untuk mmdeteksi manajernen laba adalah discretionary accruls. Yariabel dependen yang digunakan adalah totalaccruals. Yariqbel indepmden dalam penelitian ini adalah total aWiva tetap (PPE) dan delta revenue (pendapatan tahun t dila,rangi pendapatan tahun t-1).dilatrangi deltaqccount receivable (piutang tahun t

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Linck, James S., Jeffry Netter, and Tao Shu. "Can Managers Use Discretionary Accruals to Ease Financial Constraints? Evidence from Discretionary Accruals Prior to Investment." Accounting Review 88, no. 6 (2013): 2117–43. http://dx.doi.org/10.2308/accr-50537.

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ABSTRACT: Despite a large literature on discretionary accruals, how the use of discretionary accruals impacts corporate financial decisions is not well understood. We hypothesize that a financially constrained firm with valuable projects can use discretionary accruals to credibly signal positive prospects, enabling it to raise capital to make the investments. We examine a large panel of firms during 1987 to 2009 and find that financially constrained firms with good investment opportunities have significantly higher discretionary accruals prior to investment compared to their unconstrained coun

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Raonic, Ivana, and Ali Sahin. "Do analysts understand accruals’ persistence? Evidence revisited." Journal of Applied Accounting Research 21, no. 1 (2019): 38–59. http://dx.doi.org/10.1108/jaar-07-2018-0103.

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Purpose The purpose of this paper is to revisit the question of whether analysts anticipate accruals’ predicted reversals (or persistence) of future earnings. Prior evidence documents that analysts who provide information to investors are over optimistic about firms with high working capital (WC) accruals. The authors propose that empirical models using WC accruals alone may be incomplete and hence not entirely appropriate to assess the level of analysts’ understanding of accruals. The authors argue that analysts’ optimism about WC accruals might not be due to their lack of sophistication, but

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Cheng, C. S. Agnes, and Wayne B. Thomas. "Evidence of the Abnormal Accrual Anomaly Incremental to Operating Cash Flows." Accounting Review 81, no. 5 (2006): 1151–67. http://dx.doi.org/10.2308/accr.2006.81.5.1151.

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Recent research provides evidence that the operating cash flows-to-price ratio subsumes accruals in explaining future annual returns. This suggests that the accrual anomaly is part of the overall value-glamour anomaly and does not represent the mispricing of earnings. We extend the literature by using multiple measures of abnormal accruals and separate analyses of future annual returns and future earnings announcement returns. The results reveal that the operating cash flows-to-price ratio does not subsume abnormal accruals in explaining future annual returns or future announcement returns. We

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Resutek, Robert J. "Intangible Returns, Accruals, and Return Reversal: A Multiperiod Examination of the Accrual Anomaly." Accounting Review 85, no. 4 (2010): 1347–74. http://dx.doi.org/10.2308/accr.2010.85.4.1347.

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ABSTRACT: Prior studies employ a two-period empirical model and interpret the negative association between accruals in period one and returns in period two as evidence that investors misprice the information contained in accruals. In contrast to prior studies, I employ a three-period log-linear model decomposed from a firm’s book-to-market ratio and show that investors do not misprice the information contained in accruals. My study shows that in the four-year period prior to accrual recognition, equity prices tend to be driven disproportionately by intangible returns, or returns not explained

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Barth, Mary E., Donald P. Cram, and Karen K. Nelson. "Accruals and the Prediction of Future Cash Flows." Accounting Review 76, no. 1 (2001): 27–58. http://dx.doi.org/10.2308/accr.2001.76.1.27.

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Building on the Dechow et al. (1998) model of the accrual process, this study investigates the role of accruals in predicting future cash flows. The model shows that each accrual component reflects different information relating to future cash flows; aggregate earnings masks this information. As predicted, disaggregating accruals into major components—change in accounts receivable, change in accounts payable, change in inventory, depreciation, amortization, and other accruals—significantly enhances predictive ability. Each accrual component, including depreciation and amortization, is signific

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Izadi Zadeh Darjezi, Javad, Homagni Choudhury, and Alireza Nazarian. "Simulation evidence on the properties of alternative measures of working capital accruals." International Journal of Accounting & Information Management 25, no. 4 (2017): 378–94. http://dx.doi.org/10.1108/ijaim-12-2016-0114.

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Purpose This paper aims to investigate the specification and power of tests based on the DD and modified DD model through the UK data between years 2000 and 2013, and make comparisons with tests using working capital accruals creating a measure of accruals quality as the standard deviation of the residuals value from firm-specific regressions base on working capital accruals on last, current and one-year-ahead cash flows from operations. Design/methodology/approach This study focuses both on the DD model and modified DD model to find out which of them can more accurately capture total working

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Lim, Seung-Yeon. "Consolidated Financial Statements, Industry Classification, and Discretionary Accruals." Dongguk Business Research Institute 47, no. 1 (2025): 1–20. https://doi.org/10.55685/bcr.2025.47.1.1.

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This study analyzes the effect of the difference between consolidated and separate financial statement revenue on the appropriateness of discretionary accruals, focusing on Korean listed companies for which the consolidated financial statement became the primary financial statement following the adoption of K-IFRS. Discretionary accruals are typically estimated using accrual models by industry and year. A large revenue discrepancy between consolidated and separate financial statements may indicate that the performance of subsidiaries in various industries could influence the estimation of disc

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Gong, Guojin, Laura Yue Li, and Hong Xie. "The Association between Management Earnings Forecast Errors and Accruals." Accounting Review 84, no. 2 (2009): 497–530. http://dx.doi.org/10.2308/accr.2009.84.2.497.

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ABSTRACT: We investigate the association between errors in management forecasts of subsequent year earnings and current year accruals. In an uncertain operating environment, managers' assessments of their firms' business prospects are imperfect. Since managers' imperfect business assessments influence both accruals generation and earnings projection, we hypothesize that management earnings forecasts exhibit greater optimism (pessimism) when accruals are relatively high (low). Consistent with this hypothesis, we find a positive association between management earnings forecast errors and accrual

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Sullivan, Michael, and Andrew Jianzhong Zhang. "The Accrual Anomaly and the Announcement Effect of Short Arbitrage." Quarterly Journal of Finance 07, no. 01 (2017): 1650017. http://dx.doi.org/10.1142/s2010139216500178.

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We investigate the accrual anomaly by examining the stock market reaction around the release of short interest information for firms with high accruals. We show that arbitrage activity, proxied by short interest, focuses on mispricing of firms with high accruals. In particular, we provide evidence that high accrual firms experience significant negative returns when high short interest levels are announced. In contrast, the announcement effect does not vary by short selling activity for low accrual firms. Our findings are consistent with the view that the accrual anomaly is due to overpricing.

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Baber, William R., Sok-Hyon Kang, and Ying Li. "Modeling Discretionary Accrual Reversal and the Balance Sheet as an Earnings Management Constraint." Accounting Review 86, no. 4 (2011): 1189–212. http://dx.doi.org/10.2308/accr-10037.

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ABSTRACT This study presents conceptual and empirical analyses of discretionary accrual reversal in the earnings management context. We specifically focus on the extent that income-increasing (decreasing) discretionary accruals initiated in a prior period reverse to become income-decreasing (increasing) accruals in the current period. The analysis suggests that the extent that such reversals constrain the ability to manage toward earnings objectives depends on both the magnitude of past accrual-based earnings management and the reversal speed of past discretionary accruals. To demonstrate the

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Doyle, Jeffrey T., Weili Ge, and Sarah McVay. "Accruals Quality and Internal Control over Financial Reporting." Accounting Review 82, no. 5 (2007): 1141–70. http://dx.doi.org/10.2308/accr.2007.82.5.1141.

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We examine the relation between accruals quality and internal controls using 705 firms that disclosed at least one material weakness from August 2002 to November 2005 and find that weaknesses are generally associated with poorly estimated accruals that are not realized as cash flows. Further, we find that this relation between weak internal controls and lower accruals quality is driven by weakness disclosures that relate to overall company-level controls, which may be more difficult to “audit around.” We find no such relation for more auditable, account-specific weaknesses. We find similar res

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Barth, Mary E., William H. Beaver, John R. M. Hand, and Wayne R. Landsman. "Accruals, Accounting-Based Valuation Models, and the Prediction of Equity Values." Journal of Accounting, Auditing & Finance 20, no. 4 (2005): 311–45. http://dx.doi.org/10.1177/0148558x0502000401.

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This study uses out-of-sample equity value estimates to determine whether earnings disaggregation, imposing linear information valuation model (LIM) structure and separate industry estimation of valuation model parameters aid in predicting contemporaneous equity values. We consider three levels of earnings disaggregation: aggregate earnings, cashflow and total accruals and cash flow and four major components of accruals. For pooled estimations, imposing the LIM structure results in significantly smaller prediction errors; for by-industry estimations, it does not. However, by-industry predictio

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Francis, Jere R., Edward L. Maydew, and H. Charles Sparks. "The Role of Big 6 Auditors in the Credible Reporting of Accruals." AUDITING: A Journal of Practice & Theory 18, no. 2 (1999): 17–34. http://dx.doi.org/10.2308/aud.1999.18.2.17.

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This study investigates if the use of a Big 6 auditor is increasing in the firm's endogenous propensity to generate accruals. High-accrual firms have greater scope for aggressive and/or opportunistic earnings management and therefore have an incentive to hire a Big 6 auditor to provide assurance that reported earnings are credible. For a large sample of NASDAQ firms over the period 1975–1994 we find that the likelihood of using a Big 6 auditor is increasing in firms' endogenous propensity for accruals. Even though Big-6-audited firms have higher levels of total accruals, we also find they have

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Fairfield, Patricia M., J. Scott Whisenant, and Teri Lombardi Yohn. "Accrued Earnings and Growth: Implications for Future Profitability and Market Mispricing." Accounting Review 78, no. 1 (2003): 353–71. http://dx.doi.org/10.2308/accr.2003.78.1.353.

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Prior research reveals that the accrual component of profitability is less persistent than the cash flow component, and that investors fail to fully appreciate their differing implications for future profitability (Sloan 1996). However, accruals are a component of growth in net operating assets as well as a component of profitability. Just as we can disaggregate profitability into accruals and cash flows from operations, we can disaggregate growth in net operating assets into accruals and growth in long-term net operating assets. We find that, after controlling for current profitability, both

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Kumar, Manish, and Rishabh Goswami. "EARNINGS MANAGEMENT AND FIRM’S SUBSEQUENT PERIOD PERFORMANCE: A STUDY ON NON-FINANCIAL INDIAN LISTED FIRMS." JOURNAL OF INTERNATIONAL BUSINESS AND ECONOMY 23, no. 1 (2022): 1–19. http://dx.doi.org/10.51240/jibe.2022.1.1.

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While studies internationally have found an association between earnings management and the firm’s future performance, there is limited literature concerning Indian firms. Prior research in the Indian context has revealed the existence of opportunistic accruals management. However, its impact on a firm’s future performance remains unexplored. Thus, this study examines the impact of accrual-based earnings management on future performance among listed non-financial Indian firms. This study estimates accruals management proxies for 2006-2017 using the widely accepted modified-Jones model of discr

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Sandoval, Alberto, Javier Márquez, and Ignacio Cervera. "The countercyclical long-term operating accrual-based trading strategy in the Stoxx Europe 600 index: The importance of asset and liability components." PLOS ONE 17, no. 5 (2022): e0266045. http://dx.doi.org/10.1371/journal.pone.0266045.

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This work uses long-term operating accruals, rather than current, as an accounting measure to identify major anomalies. Past and abundant accounting and financial literature associates anomalies with problems of reliability and assigns lower reliability to long-term operating accruals than to current accruals. We investigate the relation between scaled operating accruals and size-adjusted abnormal returns for nonfinancial firms listed in the Stoxx Europe 600 index for the period 2000–2021. We find consistent evidence of (1) a higher long-term operating accrual anomaly than working capital accr

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Richardson, Scott A., Richard G. Sloan, Mark T. Soliman, and I˙rem Tuna. "The Implications of Accounting Distortions and Growth for Accruals and Profitability." Accounting Review 81, no. 3 (2006): 713–43. http://dx.doi.org/10.2308/accr.2006.81.3.713.

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Following Sloan (1996), numerous studies document that the accrual component of earnings is less persistent than the cash flow component of earnings. Disagreement exists, however, as to the explanation for this result. One stream of literature follows Sloan's lead in arguing that this result is attributable to accounting distortions (Xie 2001; Dechow and Dichev 2002; Richardson et al. 2005). A second stream of literature argues that this result is attributable to a more general growth effect and that growth-related factors such as diminishing returns to new investment explain the lower persist

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Lee, Cheol, Jong Eun Lee, and Myung Seok Park. "Do PCAOB Inspections Improve Working Capital Accrual Reliability? Evidence from the PCAOB Annual versus Triennial Inspection Exposure." Accounting Horizons 34, no. 2 (2020): 147–66. http://dx.doi.org/10.2308/horizons-17-180.

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SYNOPSIS In this study, we examine whether the ability of working capital (WC) accruals to predict future earnings and cash flows differs between registrants whose auditors are subject to annual Public Company Accounting Oversight Board (PCAOB) inspections and those whose auditors are subject to triennial PCAOB inspections. We find that WC accruals of clients audited by auditors subject to annual PCAOB inspections enhance earnings persistence more and map into future cash flow realizations better than those audited by auditors subject to triennial PCAOB inspections. These findings are stronger

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Barua, Abhijit, Lewis F. Davidson, Dasaratha V. Rama, and Sheela Thiruvadi. "CFO Gender and Accruals Quality." Accounting Horizons 24, no. 1 (2010): 25–39. http://dx.doi.org/10.2308/acch.2010.24.1.25.

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SYNOPSIS: The authors examine the association between chief financial officer (hereafter, CFO) gender and the quality of accruals. Based on findings in prior research on gender differences in a variety of decision settings—risk-taking attitudes, financial judgments, and regulatory compliances—they hypothesize that firms with female CFOs will have higher quality of accruals. The empirical findings, based on a sample of 1,559 (1,222) firms in 2005 (2004), support this hypothesis. The study shows that companies with female CFOs have lower performance-matched absolute discretionary accruals and lo

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Jaggi, Bikki, and Picheng Lee. "Earnings Management Response to Debt Covenant Violations and Debt Restructuring." Journal of Accounting, Auditing & Finance 17, no. 4 (2002): 295–324. http://dx.doi.org/10.1177/0148558x0201700402.

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The study investigates whether the choice of income-increasing or income-decreasing discretionary accruals is related to the severity of financial distress and whether this choice is also influenced by the creditors' waivers of debt covenant violations. Financially distressed firms experiencing debt covenant violations and/or debt restructuring during the 1989–96 period are used to evaluate the management's choice of discretionary accruals. Discretionary accruals are calculated based on four different accrual models. The results show that managers of financial distressed firms use income-incre

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Asim, Amna, and Danish Ahmed Siddiqui. "Asymmetrically Timely Loss Recognition and the Accrual Anomaly: Evidence From Pakistan’s Non-financial Sectors." International Journal of Accounting and Financial Reporting 10, no. 3 (2020): 1. http://dx.doi.org/10.5296/ijafr.v10i3.17203.

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An important role of Conditional conservatism is to align the timely expense recognition of revenue generated in terms of losses compared to the profit over negative components of accruals. Accrual anomaly shows asymmetric differential persistence for accruals and cash flows in years of economic gains rather than losses. The aim of this study to determine the asymmetric timely loss recognition and accrual anomaly of the non-financial firms listed at Pakistan Stock exchange (PSX). Top volume non-financial firms listed at PSX were taken for this study over a period of 2011 to 2018. The direct im

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Reyes, Vincent Edgar, Terry L. Evans, Robert Alan VanderWeele, et al. "Overcoming clinical trial accrual barriers at UPMC: A successful experience." Journal of Clinical Oncology 38, no. 15_suppl (2020): e14152-e14152. http://dx.doi.org/10.1200/jco.2020.38.15_suppl.e14152.

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e14152 Background: UPMC Hillman Cancer Center Medical Oncology Network is one of the largest integrated community oncology network in the United States. A large gap exists between trial participation rates and the willingness of patients and physicians. There are numerous barriers to clinical trial accrual in the medical oncology community. UPMC identified and created solutions to overcome barriers, and thus dramatically increase clinical trial accrual in 2019. Methods: A physician led advisory board was created to identity problems and find solutions to increase clinical trial accrual in the

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Okabrian, Soni, Afifa Nurhanifah, Kamaluddin Rahmat, and Venni Avionita. "The Accrual Quality and Governance on Stock Return." Jurnal Akuntansi & Keuangan Unja 8, no. 1 (2023): 35–41. http://dx.doi.org/10.22437/jaku.v8i1.27200.

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This study aims to determine the effect of accrual quality through discretionary accruals and governance through institutional ownership, independent commissioners, audit committees and directors on Stock Returns. The study used data from 39 companies included in the Kompas 100 index from 2019 to 2021. The results showed that there was a significant effect on accruals and independent commissioners' discretionary variables on Stock Returns, while for institutional ownership, audit committee and advisory variables had no effect on Stock Returns. . Discretionary accruals have a negative effect on

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Cheng, S., M. Dietrich, S. Finnigan, et al. "A sense of urgency: Evaluating the link between clinical trial development time and the accrual performance of CTEP-sponsored studies." Journal of Clinical Oncology 27, no. 18_suppl (2009): CRA6509. http://dx.doi.org/10.1200/jco.2009.27.18_suppl.cra6509.

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CRA6509 Background: Post-activation 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. Methods: National Cancer Institute Cancer Therapy Evaluation Program (NCI-CTEP) sponsored trials for all therapeutic, non-pediatric phase I,I/II, II, and III studies activated in an eight year period (2000–2007) were investigated (n=553). Successful trials were those achieving 100% of minimum accrual goal. Time to open a study was the calendar time from initial CTEP submission t

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Shamsul Nahar Abdullah. "Earnings Management in Small Listed Firms in Malaysia Using Quantile Regression." International Journal of Business and Society 23, no. 1 (2022): 326–41. http://dx.doi.org/10.33736/ijbs.4615.2022.

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This study examines the role of board independence and audit committee expertise in accounting on earnings management in small listed firms in Malaysia, which have been neglected in corporate governance research. Due to their small size, the listing requirements imposed on them by Bursa Malaysia are less stringent. Hence, these firms are predicted to have a higher tendency to manage earnings compared to large listed firms. All firms listed on the Bursa Malaysia ACE Market during the financial years 2012 to 2014 inclusive were selected. The data were analysed using quantile regression to enable

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Shi, Linna, and Huai Zhang. "On Alternative Measures of Accruals." Accounting Horizons 25, no. 4 (2011): 811–36. http://dx.doi.org/10.2308/acch-50050.

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SYNOPSIS This paper investigates the difference between two widely used measures of accruals and their differential impact on accrual strategy returns. The two measures are accruals computed using consecutive changes in the balance sheet items and accruals computed as earnings minus cash flows from operating activities, both from the cash flow statement. Our investigations reveal that the difference between the two measures is caused by four items and non-articulations in changes in working capital accounts and depreciation expenses, in addition to non-articulation events as identified by Hrib

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Kim, Young Jun, Jung Hoon Kim, Sewon Kwon, and Su Jeong Lee. "Percent accruals and the accrual anomaly: Korean evidence." Pacific-Basin Finance Journal 35 (November 2015): 340–66. http://dx.doi.org/10.1016/j.pacfin.2015.02.006.

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Kim, Daniel J., Dan Otap, Nora Ruel, Naveen Gupta, Naveed Khan, and Tanya Dorff. "NCI–Clinical Trial Accrual in a Community Network Affiliated with a Designated Cancer Center." Journal of Clinical Medicine 9, no. 6 (2020): 1970. http://dx.doi.org/10.3390/jcm9061970.

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Most cancer care is delivered in the community, while most clinical trials exist in academic centers. We analyzed clinical trial accrual of a tertiary care cancer center and its affiliated community sites to better understand what types of trials accrued at the community sites and whether community accrual increased ethnic diversity. The institutional clinical trial database was searched for solid tumor accruals during 2018–2019. Patient’s race was abstracted, and trial’s funding source, phase, and disease type/stage were tabulated. Of 3689 accruals, 133 were at community sites, representing 2

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Choi, Won-Wook, and Hyun-Ah Lee. "Management Of Accrual Components In Response To Corporate Income Tax Rate Changes: Evidence From Korea." Journal of Applied Business Research (JABR) 29, no. 5 (2013): 1421. http://dx.doi.org/10.19030/jabr.v29i5.8024.

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Changes in the statutory corporate income tax rate provide firms with an opportunity to reduce their tax burden by shifting their taxable income from higher to lower tax rate years. One negative consequence of shifting taxable income across years is higher variation in book income for financial reporting purposes. Taxable income and book income are closely related in most countries, and, in general, reporting volatile book income across years is not a favorable signal to investors. This study investigates how firms shift taxable income and concurrently mitigate book income fluctuation by manag

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Aryannejad, Nasim, Mohammadhossein Ghaemi, and Keyhan Maham. "The role of earnings management in the relationship between accruals and market value." Investment Management and Financial Innovations 15, no. 1 (2018): 236–44. http://dx.doi.org/10.21511/imfi.15(1).2018.20.

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The paper aims to clarify the role of earnings management in the relationship between accruals and the market value of companies. Previous studies suggest that some managers, for providing a desirable image of their performance, manage their profits through distorting cash or accruals. Consequently, investors rely on this information and estimate inaccurate stability of accruals which lead to mispricing phenomenon. Finally, the returns earned by the investors will not be equal to the expected return and thus the accrual anomaly will be created.To this aim, two hypotheses were developed and thr

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Meihami, Bahram, Zeinab Varmaghani, and Hussein Meihami. "An Investigation on the Earnings Quality in Companies (Evidence from Iran)." International Letters of Social and Humanistic Sciences 11 (September 2013): 91–99. http://dx.doi.org/10.18052/www.scipress.com/ilshs.11.91.

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A considerable focus of bottom-line income losses is important in the case of investigating quality of earnings. The future of stock returns is all associated with accruements that are in relation with reliability, and negativity. Earning increases that are accompanied by high accruals, suggesting inferiority of earnings, are related with poor future returns. This study describes the investigation of different hypotheses earnings manipulation, extrapolative fundaments about future growth, and under reaction to changes in business conditions to explain accruals’ predictive power. Differentiatio

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Hewitt, Max. "Improving Investors' Forecast Accuracy when Operating Cash Flows and Accruals Are Differentially Persistent." Accounting Review 84, no. 6 (2009): 1913–31. http://dx.doi.org/10.2308/accr.2009.84.6.1913.

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ABSTRACT: This study uses an experiment to examine (1) what factors give rise to investors' inability to fully incorporate operating cash flows and accruals into their earnings forecasts, and (2) what conditions help to improve investors' forecast accuracy when operating cash flows and accruals exhibit differential persistence. I investigate how decomposing the forecasting task and altering the presentation format combine to enable analysts and nonprofessional investors to acquire and accurately process financial statement information when operating cash flows and accruals are differentially p

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