IDEAS home Printed from https://ideas.repec.org/a/eme/ajbpps/v30y2015i1p22-48.html
   My bibliography  Save this article

Accrual reliability, earnings persistence, and stock prices: revisited

Author

Listed:
  • R. Mithu Dey
  • Lucy Lim

Abstract

Purpose - – The purpose of this paper is to replicate Richardsonet al.’s (2005) study on how accrual components’ reliability affects earnings persistence and whether investors anticipate the lower earnings persistence through stock return. In this study, the authors use more recent data to examine whether the previous results still hold. Design/methodology/approach - – The authors run the analysis using Richardsonet al.’s (2005) design of ordinary least squares and report the results using Fama and Macbeth’s (1973) procedures. Findings - – The results corroborate Richardsonet al.’s (2005) conclusions that lower reliability of total accrual (accrual components) leads to lower earnings persistence. Originality/value - – This study replicates Richardsonet al.(2005) using more recent US data. The results in this paper confirm the general conclusion in the original study: less reliable accruals lead to lower earnings persistence.

Suggested Citation

  • R. Mithu Dey & Lucy Lim, 2015. "Accrual reliability, earnings persistence, and stock prices: revisited," American Journal of Business, Emerald Group Publishing Limited, vol. 30(1), pages 22-48, April.
    • Handle: RePEc:eme:ajbpps:v:30:y:2015:i:1:p:22-48
    DOI: 10.1108/AJB-07-2014-0041
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/AJB-07-2014-0041/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://www.emerald.com/insight/content/doi/10.1108/AJB-07-2014-0041/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1108/AJB-07-2014-0041?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dinh, Tami & Schultze, Wolfgang, 2022. "Accounting for R&D on the income statement? Evidence on non-discretionary vs. discretionary R&D capitalization under IFRS in Germany," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 46(C).
    2. Fahd Alduais & Nashat Ali Almasria & Abeer Samara & Ali Masadeh, 2022. "Conciseness, Financial Disclosure, and Market Reaction: A Textual Analysis of Annual Reports in Listed Chinese Companies," IJFS, MDPI, vol. 10(4), pages 1-22, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:ajbpps:v:30:y:2015:i:1:p:22-48. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emerald Support (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.