Pairs trading and idiosyncratic cash flow risk

2020 ◽  
Author(s):  
Binh Do ◽  
Robert Faff
Keyword(s):  
Cash Flow ◽  
Pairs Trading ◽  
Cash Flow Risk

The Effects of Accruals Quality on Audit Hours and Audit Fees

2015 ◽  
Vol 32 (3) ◽  
pp. 372-400 ◽  
Author(s):  
Myojung Cho ◽  
Eunsun Ki ◽  
Soo Young Kwon
Keyword(s):  
Cash Flow ◽  
Negative Relationship ◽  
Audit Fees ◽  
Discretionary Accruals ◽  
Cash Flows ◽  
Accounting Earnings ◽  
Accruals Quality ◽  
Cash Flow Risk

We investigate whether auditors take into account accruals quality, a proxy for the cash flow risk associated with earnings, by adjusting audit hours and audit fees. Accruals quality tells investors about the mapping of accounting earnings into cash flows. Poor accruals quality weakens this mapping and thus increases this cash flow risk. We find a negative relationship between accruals quality and audit hours/fees, indicating that auditors increase their audit efforts by modifying audit procedures and substantive tests and charge higher fees for the increased cash flow risk. In addition, we find that both innate accruals quality and discretionary accruals quality are negatively related to audit hours and fees but that innate accruals quality is more likely to influence audit hours and fees than discretionary accruals quality. The results indicate that auditors incorporate the cash flow risk associated with accruals quality but that their response varies according to the source of accruals quality.

Dividend Suspensions and Cash Flow Risk during the COVID-19 Pandemic

2020 ◽  
Author(s):  
Davide Pettenuzzo ◽  
Riccardo Sabbatucci ◽  
Allan Timmermann
Keyword(s):  
Cash Flow ◽  
Cash Flow Risk
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