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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Managerial ability, forecasting quality, and open-market repurchase program completion
TL;DR: In this paper, the authors investigate whether managers with superior ability to efficiently manage corporate resources are associated with higher OMR completion rates and find that the association is further moderated by the quality of management earnings forecasts.
Journal ArticleDOI
Crime rate, real earnings management and managerial ability
TL;DR: In this paper, the authors examined the effect of managerial ability on real earnings management and the impact of real earnings managements by higher ability managers on future profitability, at a different level of the crime rate.
Journal ArticleDOI
Managerial Ability And The Effectiveness Of Internal Control Over Financial Reporting
TL;DR: In this paper, the authors investigate the association between managerial ability and managerial ability, and find that managerial ability is negatively associated with the existence of material weakness(es) in internal control over financial reporting.
Journal ArticleDOI
Is Accounting Information Quality Priced in the Managerial Labor Market
TL;DR: In this paper, the authors study whether accounting information quality (AIQ) is priced in the executive labor market and find a 7.38% pay premium for a one-standard deviation decline in AIQ measured in the years preceding the appointment.
Journal ArticleDOI
What Can Employee Perceptions of Management Tell Us About the Relation Between Tone at the Top and Audit Production Costs
TL;DR: In this paper, the relationship between tone at the top and audit production costs has been investigated and shown to be positively associated with audit production cost in the presence of heightened client risk (i.e., higher earnings manipulation risk and complex accounting).
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.