Do managers credibly use accruals to signal private information? Evidence from the pricing of discretionary accruals around stock splits

• 成果类型: Article
• 署名作者: Louis, H; Robinson, D
• 署名单位: Pennsylvania Commonwealth System of Higher Education (PCSHE); Pennsylvania State University; Pennsylvania State University - University Park; Arizona State University; Arizona State University-Tempe
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2004.07.004
• 发表日期: 2005
• 关键词: SEASONED EQUITY OFFERINGS; earnings management; Dividends; prices; FIRMS; DISCLOSURES; returns; performance; lawsuits; FUTURE

摘要

Prior studies suggest that managers use their reporting discretion to signal private information. However, because managers are often assumed to use their discretion to mislead investors, discretionary accruals might be regarded as opportunistic. We posit that combining the accrual signal with other signals may be an effective means of communicating private information. One such signal is stock splits. The stock split signal lends credibility to the accrual signal whereas the accrual signal reinforces the split signal. Accordingly, we find that, at the split announcement, the market construes the pre-split abnormal accrual as a signal of managerial optimism rather than managerial opportunism. (c) 2005 Elsevier B.V. All rights reserved.