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Accrual Anomaly: A Conceptual Perspective

Author

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  • Eveyn OHIDOA-TOUWA

    (Department of Accounting, Faculty of Management Sciences, University of Benin, Benin City, Nigeria)

Abstract

The study investigates the occurrence of accrual anomaly globally with specific attention on other countries factors beyond the informatory aspect of stocks price prediction, that account for accrual anomaly worldwide. The conceptual approach methodology was adopted; materials were sourced online and journals of accounting and finance researches from where the findings of most previous related studies were reviewed. We observed that, accrual anomaly is not only associated with the United States and countries that share common characteristics with United States, but with code law countries; country legal system, changes in accounting regimes, influenced accrual anomaly occurrence globally; also, we observed some methodological deficiencies in accrual anomaly measurement in prior studies and a limitation of Sloan coexistence hypothesis of accrual and cash flow anomalies. Hence, we recommend that; first, a pre and post study of International Financial Reporting Standard (IFRS) on accrual anomaly is necessary in order to establish the effect of changes in accounting regimes on accrual anomaly in Nigeria. Second, a validation of Mishkin-test commonly accrual anomaly test and Sloan 1996 coexistence of accrual and cash flow anomalies. Finally, a future study that will include profit and loss firms as sample is encouraged.

Suggested Citation

  • Eveyn OHIDOA-TOUWA, 2023. "Accrual Anomaly: A Conceptual Perspective," Contemporary Economy Journal, Constantin Brancoveanu University, vol. 8(4), pages 54-64.
    • Handle: RePEc:brc:brccej:v:8:y:2023:i:4:p:54-64
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    References listed on IDEAS

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    More about this item

    Keywords

    Accounting Regime; Accrual Anomaly; Corporate Governance; Efficient Market; and Misspricing;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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