Discretionary Accruals: The Measurement Error Induced By Conservatism
AbstractThis paper discusses the sign of the expected measurement error in discretionary accruals (DAC) estimates when accrual models do not control for the asymmetric treatment of gains and losses underlying conservatism. I show that DAC in firms with “bad news” are expected to be understated (positive measurement error), while those in “good news” firms will be overstated (negative measurement error). Based on this original result, and using graphical analysis, I discuss an empirical illustration, which corroborates the expectations.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoArticle provided by ISEG, Technical University of Lisbon in its journal Portuguese Journal of Management Studies.
Volume (Year): XI (2006)
Issue (Month): 2 ()
accruals; accrual models; earnings management;
Find related papers by JEL classification:
- M41 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - Accounting
- C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
You can help add them by filling out this form.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Paulo Lopes Henriques).
If references are entirely missing, you can add them using this form.