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Rong Qi - One of the best experts on this subject based on the ideXlab platform.
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Predicting Stock Market Returns with Aggregate Discretionary Accruals: predicting stock market returns
Journal of Accounting Research, 2010Co-Authors: Qiang Kang, Rong QiAbstract:We find that the positive relation between aggregate Accruals and one-year-ahead market returns documented in Hirshleifer, Hou, and Teoh [2009] is driven by Discretionary Accruals but not normal Accruals. The return forecasting power of aggregate Discretionary Accruals is robust to choices of sample periods, return measurements, estimation methods, business condition and risk premium proxies, and accrual models used to isolate Discretionary Accruals. Our extensive analysis shows that aggregate Discretionary Accruals, in sharp contrast to aggregate normal Accruals, contain little information about overall business conditions or aggregate cash flows and display little co-movement with ICAPM-motivated risk premium proxies. Our findings imply that aggregate Discretionary Accruals likely reflect aggregate fluctuations in earnings management, thereby favoring the behavioral explanation that managers time aggregate equity markets to report earnings. ©, University of Chicago on behalf of the Accounting Research Center, 2010.link_to_subscribed_fulltex
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predicting stock market returns with aggregate Discretionary Accruals
Journal of Accounting Research, 2010Co-Authors: Qiang Kang, Rong QiAbstract:We find that the positive relation between aggregate Accruals and one‐year‐ahead market returns documented in Hirshleifer, Hou, and Teoh [2009] is driven by Discretionary Accruals but not normal Accruals. The return forecasting power of aggregate Discretionary Accruals is robust to choices of sample periods, return measurements, estimation methods, business condition and risk premium proxies, and accrual models used to isolate Discretionary Accruals. Our extensive analysis shows that aggregate Discretionary Accruals, in sharp contrast to aggregate normal Accruals, contain little information about overall business conditions or aggregate cash flows and display little co‐movement with ICAPM‐motivated risk premium proxies. Our findings imply that aggregate Discretionary Accruals likely reflect aggregate fluctuations in earnings management, thereby favoring the behavioral explanation that managers time aggregate equity markets to report earnings.
Michael J Calegari - One of the best experts on this subject based on the ideXlab platform.
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the effect of tax accounting rules on capital structure and Discretionary Accruals
Journal of Accounting and Economics, 2000Co-Authors: Michael J CalegariAbstract:Abstract This study investigates the effect of changing tax accounting provisions for long-term manufacturing contracts between 1984–1985 and 1989–1990 on debt and accrual policies using a simultaneous equations approach. The results indicate that firms adjust debt ratios and Discretionary Accruals with relatively high book-tax conformity to achieve tax planning goals and use Discretionary Accruals with relatively low book-tax conformity to accomplish financial reporting objectives. Manufacturing firms directly affected by the change in tax rules for long-term contracts increase their leverage by 6.2 percentage points more than other manufacturers.
Qiang Kang - One of the best experts on this subject based on the ideXlab platform.
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Predicting Stock Market Returns with Aggregate Discretionary Accruals: predicting stock market returns
Journal of Accounting Research, 2010Co-Authors: Qiang Kang, Rong QiAbstract:We find that the positive relation between aggregate Accruals and one-year-ahead market returns documented in Hirshleifer, Hou, and Teoh [2009] is driven by Discretionary Accruals but not normal Accruals. The return forecasting power of aggregate Discretionary Accruals is robust to choices of sample periods, return measurements, estimation methods, business condition and risk premium proxies, and accrual models used to isolate Discretionary Accruals. Our extensive analysis shows that aggregate Discretionary Accruals, in sharp contrast to aggregate normal Accruals, contain little information about overall business conditions or aggregate cash flows and display little co-movement with ICAPM-motivated risk premium proxies. Our findings imply that aggregate Discretionary Accruals likely reflect aggregate fluctuations in earnings management, thereby favoring the behavioral explanation that managers time aggregate equity markets to report earnings. ©, University of Chicago on behalf of the Accounting Research Center, 2010.link_to_subscribed_fulltex
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predicting stock market returns with aggregate Discretionary Accruals
Journal of Accounting Research, 2010Co-Authors: Qiang Kang, Rong QiAbstract:We find that the positive relation between aggregate Accruals and one‐year‐ahead market returns documented in Hirshleifer, Hou, and Teoh [2009] is driven by Discretionary Accruals but not normal Accruals. The return forecasting power of aggregate Discretionary Accruals is robust to choices of sample periods, return measurements, estimation methods, business condition and risk premium proxies, and accrual models used to isolate Discretionary Accruals. Our extensive analysis shows that aggregate Discretionary Accruals, in sharp contrast to aggregate normal Accruals, contain little information about overall business conditions or aggregate cash flows and display little co‐movement with ICAPM‐motivated risk premium proxies. Our findings imply that aggregate Discretionary Accruals likely reflect aggregate fluctuations in earnings management, thereby favoring the behavioral explanation that managers time aggregate equity markets to report earnings.
Paul R. Mather - One of the best experts on this subject based on the ideXlab platform.
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MANAGERIAL SHARE OWNERSHIP AND Discretionary Accruals IN AUSTRALIA: DO INDEPENDENT AND EXECUTIVE DIRECTORS HAVE DIFFERENT INCENTIVES?
Corporate Ownership and Control, 2020Co-Authors: Arifur Khan, Paul R. MatherAbstract:We examine the relation between managerial share ownership (MSO) and Discretionary Accruals in Australia. We find a positive relation between MSO and Discretionary Accruals up to a certain level of MSO followed by a negative relation (inverse U-shaped). We suggest that these unique results are a result of certain Australian institutional features that are markedly different to those in the US and the UK and imply that the ownership-Discretionary Accruals relation is context specific with the wider corporate governance systems influencing the theorised incentive effects. We also posit that executive directors and independent directors have different ownership-Discretionary Accruals incentives and report results consistent with this proposition.
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the value of executive director share ownership and Discretionary Accruals
Accounting Research Journal, 2013Co-Authors: Arifur Khan, Paul R. MatherAbstract:Purpose – The purpose of this paper is to investigate the relation between the value of executive director share ownership and Discretionary Accruals.Design/methodology/approach – This study uses a dataset of 1,173 firm‐year observations drawn from 188 Australian listed companies for the period 2000‐2006. The analysis is based on multivariate regression analysis and ordinary least square models were used to investigate the relation between the value of managerial ownership and Discretionary Accruals. The issue of potential endogeneity is addressed by using a simultaneous equation system.Findings – A negative relation is found between value of managerial share ownership and Discretionary Accruals at lower levels of value of ownership, which is consistent with the theorised incentive alignment that as the managers commit more resources to their firms, stakeholders impose less contractual constraints specified in terms of accounting numbers and managers make lower accrual adjustments. After a certain level o...
Arifur Khan - One of the best experts on this subject based on the ideXlab platform.
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MANAGERIAL SHARE OWNERSHIP AND Discretionary Accruals IN AUSTRALIA: DO INDEPENDENT AND EXECUTIVE DIRECTORS HAVE DIFFERENT INCENTIVES?
Corporate Ownership and Control, 2020Co-Authors: Arifur Khan, Paul R. MatherAbstract:We examine the relation between managerial share ownership (MSO) and Discretionary Accruals in Australia. We find a positive relation between MSO and Discretionary Accruals up to a certain level of MSO followed by a negative relation (inverse U-shaped). We suggest that these unique results are a result of certain Australian institutional features that are markedly different to those in the US and the UK and imply that the ownership-Discretionary Accruals relation is context specific with the wider corporate governance systems influencing the theorised incentive effects. We also posit that executive directors and independent directors have different ownership-Discretionary Accruals incentives and report results consistent with this proposition.
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the value of executive director share ownership and Discretionary Accruals
Accounting Research Journal, 2013Co-Authors: Arifur Khan, Paul R. MatherAbstract:Purpose – The purpose of this paper is to investigate the relation between the value of executive director share ownership and Discretionary Accruals.Design/methodology/approach – This study uses a dataset of 1,173 firm‐year observations drawn from 188 Australian listed companies for the period 2000‐2006. The analysis is based on multivariate regression analysis and ordinary least square models were used to investigate the relation between the value of managerial ownership and Discretionary Accruals. The issue of potential endogeneity is addressed by using a simultaneous equation system.Findings – A negative relation is found between value of managerial share ownership and Discretionary Accruals at lower levels of value of ownership, which is consistent with the theorised incentive alignment that as the managers commit more resources to their firms, stakeholders impose less contractual constraints specified in terms of accounting numbers and managers make lower accrual adjustments. After a certain level o...
