Accruals quality vis-à-vis disclosure quality: Substitutes or complements?

Allbwn ymchwil: Cyfraniad at gyfnodolynErthygl

Fersiynau electronig

Dangosydd eitem ddigidol (DOI)

The impact of accruals quality and disclosure quality on stock returns is a topical issue in market-based accounting research. Most of the debate is centred on their incremental ability to predict future earnings. Recent studies suggest that higher information risk proxied by either lower accruals quality or lower disclosure quality results in higher stock returns. This paper examines the relationship between accruals quality and disclosure quality, and investigates whether they are complements or substitutes in explaining the time-series variation in portfolio returns. Applying portfolio groupings, we find a positive association between accruals quality and disclosure quality, suggesting that firms with higher disclosure quality engage less in earnings management and have higher accruals quality. Asset pricing tests show that an accruals quality factor and a disclosure quality factor explain the time-series variation in the excess returns of similar sets of portfolios. This suggests that they contain similar information and confirms the substitutive nature of accruals quality and disclosure quality factors.
Iaith wreiddiolSaesneg
Tudalennau (o-i)36-46
CyfnodolynBritish Accounting Review
Cyfrol44
Rhif y cyfnodolyn1
Dynodwyr Gwrthrych Digidol (DOIs)
StatwsCyhoeddwyd - 1 Maw 2012
Gweld graff cysylltiadau