Cash flow asymmetry: Causes and implications for conditional conservatism research

• 成果类型: Article
• 署名作者: Collins, Daniel W.; Hribar, Paul; Tian, Xiaoli (Shaolee)
• 署名单位: University of Iowa; University System of Ohio; Ohio State University
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2014.08.010
• 发表日期: 2014
• 关键词: ACCOUNTING CONSERVATISM; earnings quality; loss recognition; to-book; INFORMATION; Timeliness; accruals; dividend; FIRMS

摘要

Earnings asymmetric timeliness captures both accrual and operating cash flow (CFO) asymmetric timeliness. Because recognition of operating cash flows does not reflect differential verification thresholds for recognizing unrealized gains versus losses, CFO asymmetry adds noise or bias to tests of conditional conservatism. We show that CFO asymmetry is predictable in the cross-section, and varies systematically with life-cycle characteristics. Removing CFO from earnings and using accruals-based measures of asymmetric timeliness eliminates several biases that prior studies have attributed to other sources. Moreover, accrual asymmetric timeliness varies in the cross-section as theory predicts. Going forward, we recommend researchers use accruals-based asymmetric timeliness measures when testing for conditional conservatism. (C) 2014 Elsevier B.V. All rights reserved.