Journal ArticleDOI
Earnings-based and accrual-based market anomalies: one effect or two?
Daniel W. Collins,Paul Hribar +1 more
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TLDR
This article investigated whether the accrual pricing anomaly documented by Sloan (1996) for annual data holds for quarterly data and whether this form of market mispricing is distinct from the post-earnings announcement drift anomaly.About:
This article is published in Journal of Accounting and Economics.The article was published on 2000-02-01. It has received 338 citations till now. The article focuses on the topics: Accrual & Earnings.read more
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Capital markets research in accounting
TL;DR: This paper reviewed empirical research on the relation between capital markets and financial statements and found that the principal sources of demand for capital markets research in accounting are fundamental analysis and valuation, tests of market efficiency, and the role of accounting numbers in contracts and the political process.
Posted Content
CEO Incentives and Earnings Management
TL;DR: This article found evidence that the use of discretionary accruals to manipulate reported earnings is more pronounced at firms where the CEO's potential total compensation is more closely tied to the value of stock and option holdings.
Journal ArticleDOI
CEO incentives and earnings management
TL;DR: This article found that the use of discretionary accruals to manipulate reported earnings is more pronounced at firms where the CEO's potential total compensation is more closely tied to the value of stock and option holdings.
Journal ArticleDOI
Errors in Estimating Accruals: Implications for Empirical Research
Paul Hribar,Daniel W. Collins +1 more
TL;DR: This article examined the impact of measuring accruals as the change in successive balance sheet accounts, as opposed to measuring the accruality directly from the statement of cash flows. But their primary finding is that studies using a balance sheet approach to test for earnings management are potentially contaminated by measurement error in accrual estimates.
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The mispricing of abnormal accruals
TL;DR: In this article, the authors examined the market pricing of Jones (1991) modelestimated abnormal accruals to test whether stock prices rationally reflect the one-year-ahead earnings implications of these accruALS.
References
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Journal ArticleDOI
The relationship between return and market value of common stocks
TL;DR: Scholes et al. as discussed by the authors examined the relationship between the total market value of the common stock of a firm and its return and found that small firms had higher risk adjusted returns than large firms.
Journal Article
Do Stock Prices Fully Reflect Information in Accruals and Cash flows about Future Earnings
TL;DR: In this paper, the authors investigate whether stock prices reflect information about future earnings contained in the accrual and cash flow components of current earnings, and find that stock prices act as if investors "fixate" on earnings, failing to reflect fully information contained in both the accrued and non-accrual components of the current earnings until that information impacts future earnings.
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Accounting earnings and cash flows as measures of firm performance: The role of accounting accruals
TL;DR: The authors investigates circumstances under which accruals are predicted to improve earnings' ability to measure firm performance, as reflected in stock returns, and the results of empirical tests are consistent with these predictions.
Posted Content
Post-earnings-announcement drift - delayed price response or risk premium
TL;DR: In this paper, the authors seek to discriminate between competing explanations of post-earnings-announcement drift, and find that one class of explanations suggests that at least a portion of the price response to new information is delayed.
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Evidence that stock prices do not fully reflect the implications of current earnings for future earnings
TL;DR: This paper found that the three-day price reactions to announcements of earnings for quarters t + 1 through I + 4 are predictable, based on earnings of quarter r. Even more surprisingly, the signs and magnitudes of the three day reactions are related to the autocorrelation structure of earnings, as if stock prices fail to reflect the extent to which each firm's earnings series differs from a seasonal random walk.