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What Determines the Variability of Accounting Accruals?

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  • Zhaoyang Gu
  • Chi-Wen Lee
  • Joshua Rosett

Abstract

The variability of accounting accruals provides a measure of the normal level of managers’ accounting discretion and has important implications for event studies of earnings management. We examine how this measure is related to the economic factors including both firm characteristics and attributes of the disclosure environment. We show that the variability of accruals is related to firm size, leverage, variability of cash flows, operating cycle, growth, and other factors. Significant industry differences and temporal patterns are also found. Copyright Springer Science + Business Media, Inc. 2005

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  • Zhaoyang Gu & Chi-Wen Lee & Joshua Rosett, 2005. "What Determines the Variability of Accounting Accruals?," Review of Quantitative Finance and Accounting, Springer, vol. 24(3), pages 313-334, May.
    • Handle: RePEc:kap:rqfnac:v:24:y:2005:i:3:p:313-334
    DOI: 10.1007/s11156-005-6869-1
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    3. Nour Malijebtou Hassine & Faouzi Jilani, 2017. "Earnings Management Behavior with Respect to Goodwill Impairment Losses under IAS 36: The French Case," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 7(2), pages 177-196, April.
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    8. Rahayu Abdul Rahman & Asheq Rahman & Erlane K Ghani & Normah Hj Omar, 2019. "Government-Linked Investment Companies and Real Earnings Management: Malaysian Evidence," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 10(3), pages 299-313, May.
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    10. Hamidreza Vakilifard & Mahboobe Sadat Mortazavi, 2016. "The Impact of Financial Leverage on Accrual-Based and Real Earnings Management," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 6(2), pages 53-60, April.
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