Managerial Discretion in Accruals and Informational Efficiency

被引:16
作者
Perotti, Pietro [1 ]
Windisch, David [2 ]
机构
[1] Univ Bath, Sch Management, Bath BA2 7AY, Avon, England
[2] Karl Franzens Univ Graz, Ctr Accounting Res, Graz, Austria
基金
奥地利科学基金会;
关键词
managerial discretion; abnormal accruals; informational efficiency; stock return variance ratios; SIGNAL PRIVATE INFORMATION; EARNINGS QUALITY MEASURES; MARKET-EFFICIENCY; CROSS-SECTION; CORPORATE GOVERNANCE; IDIOSYNCRATIC RISK; SECURITY MARKET; STOCK-PRICES; TIME-SERIES; RANDOM-WALK;
D O I
10.1111/jbfa.12241
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
In this paper, we examine the relation between managerial discretion in accruals and informational efficiency. We measure managerial discretion in accruals by the absolute value of abnormal accruals. Assuming that efficient prices follow a random walk, we measure informational efficiency by using stock return variance ratios. We find that the absolute value of abnormal accruals is negatively associated with the price deviation from a random walk pattern, estimated in the 12-month period subsequent to the accrual reporting; hence, future informational efficiency increases with the extent to which managers exercise discretion over accruals. The results are consistent with the view that discretionary accruals, on average, convey useful information to investors and facilitate the price convergence to its fundamental value. Our findings are robust to a battery of tests, including tests to validate both our measures of informational efficiency and our measure of managerial discretion in accruals.
引用
收藏
页码:375 / 416
页数:42
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