Ending at the Wrong Time: The Financial Reporting Consequences of a Uniform Fiscal Year-End

• 成果类型: Article
• 署名作者: Li, Zhe; Ye, Kangtao; Zeng, Cheng (Colin); Zhang, Bo
• 署名单位: Central University of Finance & Economics; Renmin University of China; Hong Kong Polytechnic University
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/TAR-2018-0461
• 发表日期: 2023
• 页码: 367-396
• 关键词: analyst forecast accuracy; abnormal audit fees; earnings management; QUALITY; FIRMS; incentives; accruals; synchronicity; CORRUPTION; governance

摘要

There is an ongoing debate over uniformity versus flexibility in accounting regulation. This study examines the financial reporting consequences of a rigid accounting rule in China under which the fiscal year-end is uniform for all companies. Using extensive interviews together with large-sample archival analyses, we find that mismatched firms-those whose mandated financial reporting cycles are not aligned with their business cycles- exhibit higher levels of absolute abnormal accruals than their nonmismatched counterparts. Further analyses suggest that the negative association between mismatching and financial reporting quality is mainly driven by unintentional estimation errors rather than intentional earnings manipulation.