IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Interim accounting earnings and price momentum

Listed author(s):
  • Izadi Zadeh Darjezi, Javad
Registered author(s):

    We know that managers may use their discretion by structuring transactions that can alter financial reports in order to persuade stockholders in their interpretation of the underlying economic performance of the company. The study reported in this thesis examines such earnings discretion in the six monthly interim reports issued by listed firms in the UK, and investigates the relationship between estimates of earnings manipulation and the market pricing of the firm’s shares. This is tested by examining whether managers use their discretion to sustain earnings trends in the case of ‘winner’ firms, i.e. those that are in the upper range of prior returns, and likewise to keep a negative trend in ‘loser’ firms, those in the lower range of prior returns. Specifically, momentum portfolios are formed based on past six-month returns and tested for differences in future six-month earnings management, as measured by discretionary current accruals in six month interim reporting periods. The results suggest that discretionary current accruals are significantly associated with past returns for winner more than loser firms, and hence that past returns may contribute to the explanation of future earnings management, the behaviour being consistent with appearing either to persist as winners or to turn losers around

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://sro.sussex.ac.uk/id/eprint/43336
    Download Restriction: no

    Paper provided by Department of Economics, University of Sussex in its series Economics PhD Theses with number 0112.

    as
    in new window

    Length:
    Date of creation: Jan 2012
    Handle: RePEc:sus:susphd:0112
    Contact details of provider: Postal:
    Jubilee Building G08, Falmer, Brighton, BN1 9SL

    Phone: +44 (0) 1273 678889
    Fax: +44 (0)1273 873715
    Web page: http://www.sussex.ac.uk/economics
    Email:


    More information through EDIRC

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:sus:susphd:0112. 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: (Russell Eke)

    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.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 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.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.