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 Ability and Corporate Social Responsibility
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Journal ArticleDOI
Understanding the Relation between Financial Reporting Quality and Audit Quality
TL;DR: In this paper, the determinants of quality in financial reporting and auditing have been identified, and a wide set of variables have been studied in both financial reporting research and audit research.
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Trust and Financial Reporting Quality
TL;DR: In this paper, the authors investigate the association of intraorganizational trust (i.e., employees� trust in management) with three aspects of financial reporting: accruals quality, misstatements, and internal control quality.
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CEO Narcissism and Corporate Tax Sheltering
TL;DR: This paper examined the effect of CEO narcissism on an especially aggressive form of corporate tax avoidance, tax sheltering, and found that narcissism is a multifaceted personality trait associated with a sens...
Journal ArticleDOI
Managerial Ability and Credit Risk Assessment
TL;DR: This article examined the impact of managerial ability on the credit rating process and found that higher managerial ability is associated with lower variability in future earnings and stock returns, while lower assessments of credit risk are associated with higher credit ratings.
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.