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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CEO decision horizon and corporate R&D investments: an explanation based on managerial myopia and risk aversion
TL;DR: In this paper, the authors argue that a short decision horizon could divert corporate investments away from R&D investments, and they devise an industry-adjusted measurement combining CEO's expected tenure and age as a proxy for CEO decision horizon.
Journal ArticleDOI
Managerial ability, financial constraints, and the value of cash holding
TL;DR: In this paper, a skilful CEO, who persistently performs well over several years, can reduce a firm's financial constraints, and their finding is robust to an instrumental variable regression, different def...
Journal ArticleDOI
Macro uncertainty, analyst performance, and managerial ability
TL;DR: This paper found that macro uncertainty measures are significantly and negatively correlated with the accuracy and informativeness of analysts' earnings forecasts and positively correlated with dispersion of earnings forecasts, and that the negative effects of macro uncertainty on analyst performance are significantly mitigated in firms with high managerial ability.
Journal ArticleDOI
Religiosity, accounting expertise, and audit report lag: Empirical evidence from the individual level
TL;DR: In this paper, the authors investigated the effect of faithfulness and accounting expertise on audit report lag using three streams of research on faithfulness, accounting expertise, and audit report delay.
Journal ArticleDOI
How do talented managers view dividend policy? Further evidence from Chinese equity market
TL;DR: In this article, the importance of market imperfection, namely, variation in managerial ability (MA), on dividend policy in China was examined, and the authors found that the relationship between MA and dividend policy is primarily driven by non-state own enterprises compare to state own enterprises.
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.
Journal ArticleDOI
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...
Journal ArticleDOI
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.