Performance matched discretionary accrual measures

• 成果类型: Article
• 署名作者: Kothari, SP; Leone, AJ; Wasley, CE
• 署名单位: Massachusetts Institute of Technology (MIT); University of Rochester
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2004.11.002
• 发表日期: 2005
• 关键词: market-based evaluation; earnings management; EMPIRICAL POWER; association; heteroskedasticity; specification; returns; issues

摘要

We examine the specification and power of tests based on performance-matched discretionary accruals, and make comparisons with tests using traditional discretionary accrual measures (e.g., Jones and modified-Jones models). Performance matching on return on assets controls for the effect of performance on measured discretionary accruals. The results suggest that performance-matched discretionary accrual measures enhance the reliability of inferences from earnings management research when the hypothesis being tested does not imply that earnings management will vary with performance, or where the control firms are not expected to have engaged in earnings management. (c) 2004 Elsevier B.V. All rights reserved.