IDEAS home Printed from https://ideas.repec.org/a/taf/euract/v13y2004i1p73-104.html
   My bibliography  Save this article

Specification and power of cross-sectional abnormal working capital accruals models in the Spanish context

Author

Listed:
  • Jose J. Alcarria Jaime
  • Belen Gill de Albornoz Noguer

Abstract

Following previous research (e.g. Dechow et al., 1995; Peasnell et al., 2000), we use a simulation procedure to evaluate the specification and power of different working capital abnormal accruals models in the Spanish context. Specifically, we assess the Jones Standard model, the Modified Jones model, the Kang and Sivaramakrishnan model, the Margin model, the Jones Cash Flow model, and the Accounting Process model. Consistent with previous research, our results suggest that all the models analysed are well specified in a random sample of firms. Regarding the models' ability to detect artificially induced earnings management, the Jones Cash Flow and the Accounting Process models produce the most powerful tests in all three types of manipulation studied. In line with Peasnell et al. (2000), we find that the Margin model is more powerful than the Jones Standard and the Modified Jones models at detecting non-bad debt expense manipulation, while these two models perform better than the Margin model for revenue and bad debt manipulation. Our results also support the finding by Dechow et al. (1995) that their modified version of the Jones model is more powerful than its standard version at detecting revenue-based manipulation.

Suggested Citation

  • Jose J. Alcarria Jaime & Belen Gill de Albornoz Noguer, 2004. "Specification and power of cross-sectional abnormal working capital accruals models in the Spanish context," European Accounting Review, Taylor & Francis Journals, vol. 13(1), pages 73-104.
  • Handle: RePEc:taf:euract:v:13:y:2004:i:1:p:73-104
    DOI: 10.1080/0963818032000134912
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/0963818032000134912
    Download Restriction: Access to full text is restricted to subscribers.

    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. Ferrer García, Cristina & Laínez Gadea, José Antonio, 2013. "Detectando diferencias en la medición de la calidad del resultado: evidencia empírica para empresas españolas || Detecting Differences on the Earnings Quality Measurement: Empirical Evidence on Spanis," Revista de Métodos Cuantitativos para la Economía y la Empresa = Journal of Quantitative Methods for Economics and Business Administration, Universidad Pablo de Olavide, Department of Quantitative Methods for Economics and Business Administration, vol. 16(1), pages 5-28, December.

    More about this item

    Statistics

    Access and download statistics

    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:taf:euract:v:13:y:2004:i:1:p:73-104. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Longhurst). General contact details of provider: http://www.tandfonline.com/REAR20 .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.