Sustained earnings and revenue growth, earnings quality, and earnings response coefficients

• 成果类型: Article
• 署名作者: Ghosh, A; Gu, ZY; Jain, PC
• 署名单位: Georgetown University; U.S. Securities & Exchange Commission (SEC); City University of New York (CUNY) System; Baruch College (CUNY); Carnegie Mellon University
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-004-6339-3
• 发表日期: 2005
• 页码: 33-57
• 关键词: information; management; returns; equity; errors; valuation; accruals

摘要

We show that firms reporting sustained increases in both earnings and revenues have (1) higher quality earnings and (2) larger earnings response coefficients (ERCs) in comparison to firms reporting sustained increases in earnings alone. With respect to earnings quality, firms with revenue-supported increases in earnings have more persistent earnings, exhibit less susceptibility to earnings managernent, and have higher future operating performance. With respect to response coefficients, firms with revenue-supported increases in earnings have both higher ERCs and lower book value response coefficients, consistent with the implications of the Ohlson (1995, Contemporary Accounting Research 12, 661-687) model.