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Title:Essay 1. Accrual Effect in Stock Returns: Earnings Management or Sluggish Market Reactions? Essay 2. The Accrual Effect on Future Earnings
Author(s):Chan, Konan
Doctoral Committee Chair(s):Narasimhan Jegadeesh
Department / Program:Finance
Degree Granting Institution:University of Illinois at Urbana-Champaign
Subject(s):Business Administration, Accounting
Abstract:In the second essay, I examine the accrual effect on future earnings and measure the potential economic consequence of earnings management. I find that the aggregate future earnings, on average, will be impaired by $0.20 in the long-run for an $1 increase of current accruals. This negative accrual effect is more significant for firms with high price-earnings, market-to-book and high accruals where earnings management is likely to occur. Incorporating the accrual effect is useful in improving the accuracy of earnings forecasts for these firms. Accordingly, the empirical results are consistent with the notion that earnings management causes the negative relationship between accruals and future earnings.
Issue Date:2000
Description:93 p.
Thesis (Ph.D.)--University of Illinois at Urbana-Champaign, 2000.
Other Identifier(s):(MiAaPQ)AAI9955598
Date Available in IDEALS:2015-09-28
Date Deposited:2000

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