Journal ArticleDOI
Managerial Ability and Earnings Quality
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This article examined the relation between managerial ability and earnings quality and found that more able managers are associated with fewer subsequent restatements, higher earnings and accruals persistence, lower errors in the bad debt provision, and higher quality accrual estimations.Abstract:
: We examine the relation between managerial ability and earnings quality. We find that earnings quality is positively associated with managerial ability. Specifically, more able managers are associated with fewer subsequent restatements, higher earnings and accruals persistence, lower errors in the bad debt provision, and higher quality accrual estimations. The results are consistent with the premise that managers can and do impact the quality of the judgments and estimates used to form earnings. Data Availability: Data are publicly available from the sources identified in the text.read more
Citations
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The effect of local political corruption on earnings quality
Hongkang Xu,Mai Dao,Jia Wu +2 more
TL;DR: In this paper, the authors examined whether political corruption of a local government at judicial district level influences earnings management activities of firms located in a corrupt area and found that firms in corrupt regions are more likely to manage earnings through accruals management and real activities manipulation (i.e., sales manipulation and overproduction).
Journal ArticleDOI
Managerial ability and acquirer returns
Sheng-Syan Chen,Chih-Yen Lin +1 more
TL;DR: This paper examined the impact of managerial ability on the profitability of mergers and acquisitions and found that firms with high managerial ability generate better announcement abnormal returns as well as better post-announcement abnormal returns than deals by firms with low managerial ability.
Journal ArticleDOI
Business Strategy and Labor Investment Efficiency
Ahsan Habib,Mostafa Monzur Hasan +1 more
Journal ArticleDOI
Does fairness breed efficiency? Pay gap and firm productivity in China ☆
Yunhao Dai,Dongmin Kong,Jin Xu +2 more
TL;DR: Li et al. as mentioned in this paper examined the effects of pay gap between executives and employees on firm productivity and found that productivity is an inverted-U function of the pay gap, and that outside job opportunities and employees' skills significantly moderate the inverted U relationship.
Journal ArticleDOI
Principles-Based Standards and Earnings Attributes
TL;DR: Barth et al. as mentioned in this paper examined the relation between principles-based standards and earnings attributes and found that firms' earnings are more informative and persistent and have a larger positive association with future cash flows, on average, when firms' standards are more principles based.
References
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Journal ArticleDOI
Estimating Standard Errors in Finance Panel Data Sets: Comparing Approaches
TL;DR: In this article, the authors examine the different methods used in the literature and explain when the different approaches yield the same (and correct) standard errors and when they diverge, and give researchers guidance for their use.
Journal ArticleDOI
Industry costs of equity
Eugene F. Fama,Kenneth R. French +1 more
TL;DR: In this paper, the authors show that standard errors of more than 3.0% per year are typical for both the CAPM and the three-factor model of Fama and French (1993), and these large standard errors are the result of uncertainty about true factor risk premiums and imprecise estimates of the loadings of industries on the risk factors.
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Interaction terms in logit and probit models
Chunrong Ai,Edward C. Norton +1 more
TL;DR: In this article, the authors present the correct way to estimate the magnitude and standard errors of the interaction effect in nonlinear models, which is the same way as in this paper.
Journal ArticleDOI
The Quality of Accruals and Earnings: The Role of Accrual Estimation Errors
TL;DR: In this paper, the authors suggest a new measure of one aspect of the quality of working capital accruals and earnings, i.e., the ability to shift or adjust the recognition of cash flows over time so that t...
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Audit committee, board of director characteristics, and earnings management
TL;DR: In this paper, the authors examined whether audit committee and board characteristics are related to earnings management by the firm and found a negative relation between audit committee independence and abnormal accruals.