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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Supervision or collusion? CEO–CFO social ties and financial reporting quality
TL;DR: Wang et al. as discussed by the authors examined the impact of social ties between CEOs and CFOs on financial reporting quality and found that firms with CEO-CFO social ties are more likely to exhibit higher financial reporting qualities.
Investigating the Association between Managerial Ability and Management Earnings Forecasts Error
Mohsen Dastgir,Akram Rezaie +1 more
TL;DR: In this article, the authors investigated the relationship between managers' ability and management earnings forecasting error. But they found that there is a significant negative correlation between the ability of managers and the error rate of profit forecasts by managers.
Journal ArticleDOI
Chipping Away at Financial Reporting Quality
TL;DR: In this paper, the quality of a firm's financial reports is a function of the effort expended by the CFO, and the effects of lower quality reporting are demonstrated by results linking CFO leisure with greater analyst forecast dispersion and weaker earnings response coefficients.
Journal ArticleDOI
Evidence on using the estimation of level 3 fair values as an earnings management tool: evidence from Taiwan
TL;DR: In this article, the authors present direct evidence on whether the estimations of Level 3 fair values (L3FVs) are used as an earnings management tool, but there is a lack of direct evidence.
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...
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.