Does managerial sentiment affect accrual estimates? Evidence from the banking industry

• 成果类型: Article
• 署名作者: Hribar, Paul; Melessa, Samuel J.; Small, R. Christopher; Wilde, Jaron H.
• 署名单位: University of Iowa; University of Toronto
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2016.10.001
• 发表日期: 2017
• 关键词: Investor sentiment; earnings management; Loan losses; MARKET; PSYCHOLOGY

摘要

We examine whether managerial sentiment is associated with errors in accrual estimates. Using public banks we find (1) managerial sentiment is negatively associated with loan loss provision estimates, (2) future charge-offs per dollar of provision are positively associated with sentiment when the provision is estimated, and (3) the effects of sentiment are greater for firms with more uncertain charge-offs. Results are similar for private banks, suggesting accrual manipulation related to capital market incentives is unlikely to explain the results. Although economic fundamentals explain most of the variation in the provision, we find sentiment has an incremental and economically meaningful effect. (C) 2016 Elsevier B.V. All rights reserved.