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“Accruals” Discricionários: o Erro de Estimação Induzido pelo Conservantismo

Author

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  • José António Moreira

    (CETE, Faculdade de Economia, Universidade do Porto)

Abstract

This 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 find 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.

Suggested Citation

  • José António Moreira, 2006. "“Accruals” Discricionários: o Erro de Estimação Induzido pelo Conservantismo," CEF.UP Working Papers 0606, Universidade do Porto, Faculdade de Economia do Porto.
    • Handle: RePEc:por:cetedp:0606
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    More about this item

    Keywords

    accruals; accrual models; earnings management.;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables

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