Accrual duration

• 成果类型: Article
• 署名作者: Dichev, Ilia; Owens, Edward
• 署名单位: Emory University; Utah System of Higher Education; University of Utah
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-024-09826-8
• 发表日期: 2025
• 页码: 611-649
• 关键词: earnings management; Cash flows; performance; persistence; reversal; QUALITY

摘要

We define accrual duration as the length of time between an accrual and its associated cash flow. Accrual duration is inextricably linked to accrual discretion and accrual quality by the fundamentals of the accrual process-the recording of longer-duration accruals involves using longer-term estimates, which makes them relatively more discretionary and less reliable, ceteris paribus. We provide the theoretical development of this broad idea and demonstrate several empirical applications linking accrual duration to earnings persistence, Accounting and Auditing Enforcement Releases, asset write-offs, and the observed kink in the earnings distribution. A major advantage of the accrual duration approach is that it is quite general, which allows us to derive a powerful new model of total accruals discretion and quality as well as a novel measure of total accruals duration. Finally, we discuss how the accrual duration approach can illuminate numerous ongoing issues in accounting research.