Relationship between Risks and Accruals Quality

2015 ◽  
Author(s):  
Parvaneh Hezareh ◽  
Zahra Ahmadi
Keyword(s):  
Accruals Quality

Information risk, stock returns, and asset pricing: Evidence from China

2017 ◽  
Vol 30 (4) ◽  
pp. 379-394 ◽  
Author(s):  
Raheel Safdar ◽  
Chen Yan
Keyword(s):  
Stock Returns ◽  
Factor Model ◽  
Empirical Literature ◽  
Firm Level ◽  
Cross Sectional ◽  
Market Pricing ◽  
Content Type ◽  
Information Risk ◽  
Accruals Quality ◽  
Three Factor

Purpose This study aims to investigate information risk in relation to stock returns of a firm and whether information risk is priced in China. Design/methodology/approach The authors used accruals quality (AQ) as their measure of information risk and performed Fama-Macbeth regressions to investigate association of AQ with future realized stock returns. Moreover, two-stage cross-sectional regression analysis was performed, both at firm level and at portfolio level, to test if the AQ factor is priced in China in addition to existing factors in the Fama French three-factor model. Findings The authors found poor AQ being associated with higher future realized stock returns. Moreover, they found evidence of market pricing of AQ in addition to existing factors in the Fama French three-factor model. Further, subsample analysis revealed that investors value AQ more in non-state owned enterprises than in state owned enterprises. Research limitations/implications The study sample comprises A-shares only and the generalization of the findings is limited by the peculiar institutional and economic setup in China. Originality/value This study contributes to market-based accounting literature by providing further insight into how and if investors value information risk, and it seeks to fill gap in empirical literature by providing evidence from the Chinese capital market.

Accruals quality and corporate cash holdings

2009 ◽  
Vol 49 (1) ◽  
pp. 95-115 ◽  
Author(s):  
Pedro J. García-Teruel ◽  
Pedro Martínez-Solano ◽  
Juan Pedro Sánchez-Ballesta
Keyword(s):  
Cash Holdings ◽  
Accruals Quality ◽  
Corporate Cash Holdings

scholarly journals Did CEO’s Equity-Based Compensation Benefit Firms at All? – Evidence From the Regime Before Adoption of Statement of Financial Accounting Standards 123(R)

2018 ◽  
Vol 8 (2) ◽  
pp. 1
Author(s):  
Min (Shirley) Liu
Keyword(s):  
Empirical Evidence ◽  
Agency Problem ◽  
Accounting Standards ◽  
Compensation Method ◽  
Financial Accounting ◽  
Sensitivity Tests ◽  
Accruals Quality ◽  
Reported Earnings

Previous studies documented empirical evidence that stock- and option-based compensation exacerbates the agency problem, which is opposite to the goal of awarding such kind of compensations to executives. If the stock- and option-based compensation is so bad, why did companies previously adopt such kind of compensation method. I use data from 1992-2005, a period before the adoption of FAS 123 (R), to examine whether the stock-based and option-based compensation benefits firms at all. I find that the firms, whose CEOs received higher values of stock- and option- compensations, have higher accruals quality and more predictable reported earnings, as well as enjoy lower implied costs of equity capital.These findings are robust to various sensitivity tests. The results indicate that such compensation method at least provided certain benefits to the firms.

Accruals Quality and Analyst Coverage

2006 ◽  
Author(s):  
Minsup Song ◽  
Mary Harris Stanford ◽  
Gerald J. Lobo
Keyword(s):  
Analyst Coverage ◽  
Accruals Quality
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