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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Distracted institutional shareholders and managerial myopia: Evidence from R&D expenses
TL;DR: In this paper, the authors explore how institutional shareholder attention affects firms' decisions to cut R&D expenses and find that firms with distracted shareholders are more likely to engage in short-term behavior.
Journal ArticleDOI
Cross redundancy and sensitivity in DEA models
Kyuseok Lee,Kyuwan Choi +1 more
TL;DR: In this article, the authors examined the effect of a cross redundancy on DEA and showed that the addition or deletion of such a cross-redundant variable does not affect the efficiency estimates yielded by the CCR or BCC models.
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Auditor-Provided Tax Services and Income Tax Estimation Error
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Journal ArticleDOI
Industry tournament incentives and stock price crash risk
TL;DR: This article found that CEOs with stronger incentives to progress in the managerial labor market tournament have significantly greater stock price crash risk, consistent with a greater propensity for these executives to withhold negative firm-specific information.
Journal ArticleDOI
Is there a dark side of managerial ability? Evidence from the use of derivatives and firm risk in China
Lingsha Cheng,Adrian Cheung +1 more
TL;DR: This article found that the relationship between the use of derivatives and firm risk is negative, but this negative relationship is less pronounced for firms with highability managers compared to firms with low-ability managers, suggesting that managerial ability has a positive moderating effect on the negative relationship.
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.