The conservatism principle and the asymmetric timeliness of earnings1
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In this paper, the authors interpret conservatism as resulting in earnings reflecting "bad news" more quickly than "good news" and find that negative earnings changes are less persistent than positive earnings changes.About:
This article is published in Journal of Accounting and Economics.The article was published on 1997-12-01 and is currently open access. It has received 3874 citations till now. The article focuses on the topics: Earnings quality & Earnings yield.read more
Citations
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Performance matched discretionary accrual measures
TL;DR: In this article, the authors examine the specification and power of tests based on performance-matched discretionary accruals, and make comparisons with tests using traditional discretionary accumrual measures (e.g., Jones and modified-Jones models).
Journal ArticleDOI
Understanding Earnings Quality: A Review of the Proxies, Their Determinants and Their Consequences
TL;DR: This paper pointed out that the "quality" of earnings is a function of the firm's fundamental performance and suggested that the contribution of a firms fundamental performance to its earnings quality is suggested as one area for future work.
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The effect of international institutional factors on properties of accounting earnings
TL;DR: In this paper, the authors characterize the ''shareholder'' and ''stakeholder'' corporate governance models of common and code law countries respectively as resolving information asymmetry by public disclosure and private communication.
Journal ArticleDOI
Costs of Equity and Earnings Attributes
TL;DR: In this paper, the authors examine the relation between the cost of equity capital and seven attributes of earnings: accrual quality, persistence, predictability, smoothness, value relevance, timeliness, and conservatism.
Journal ArticleDOI
Earnings quality in uk private firms: comparative loss recognition timeliness
Ray Ball,Lakshmanan Shivakumar +1 more
TL;DR: In this article, the authors hypothesize that private company financial reporting nevertheless is of lower quality due to different market demand, regulation notwithstanding, and a large UK sample supports this hypothesis, using Basu's (1997) measure of timely loss recognition and a new accruals-based method.
References
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Journal ArticleDOI
A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity
TL;DR: In this article, a parameter covariance matrix estimator which is consistent even when the disturbances of a linear regression model are heteroskedastic is presented, which does not depend on a formal model of the structure of the heteroSkewedness.
Journal ArticleDOI
An empirical evaluation of accounting income numbers
Ray Ball,Philip Brown +1 more
TL;DR: In this article, it is argued that income numbers cannot be defined substantively, that they lack "meaning" and are therefore of doubtful utility, and the argument stems in part from the patchwork development of account-based theories.
Book
Positive Accounting Theory
TL;DR: In this article, the authors review the theory and methodology underlying the economics-based empirical literature in accounting and discuss the role of theory in empirical work and the extent to which the theories are consistent with those studies' evidence.
Journal ArticleDOI
Dividend Policy under Asymmetric Information
Merton H. Miller,Kevin Rock +1 more
TL;DR: In this article, the authors extend the standard finance model of the firm's dividend/investment/financing decisions by allowing the managers to know more than outside investors about the true state of the current earnings.
Journal ArticleDOI
Accounting earnings and cash flows as measures of firm performance: The role of accounting accruals
TL;DR: The authors investigates circumstances under which accruals are predicted to improve earnings' ability to measure firm performance, as reflected in stock returns, and the results of empirical tests are consistent with these predictions.
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Earnings quality in uk private firms: comparative loss recognition timeliness
Ray Ball,Lakshmanan Shivakumar +1 more