The Effect of Accrual Heterogeneity on Accrual Quality Inferences

• 成果类型: Article
• 署名作者: Dechow, Patricia M.; Larson, Chad R.; Resutek, Robert J.
• 署名单位: University of Southern California; University of Houston System; University of Houston; University System of Georgia; University of Georgia
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/TAR-2019-0200
• 发表日期: 2022
• 页码: 245-273
• 关键词: earnings quality; Cash flows; INFORMATION; INVESTMENT; management

摘要

We investigate the impact of the mixed attribute GAAP measurement model on accrual quality inferences. GAAP rules vary from an income statement matchingfocus to a balance sheet fair-valuefocus. Accrual properties are also affected by the business activity being measured and the activity's recurrence. Furthermore, accrual measurement is affected by managerial estimation error/manipulation. As a consequence, accruals are heterogeneous with predictably different statistical properties. We construct a dataset of more than 100,000 accrual items that Compustat aggregates into data item FOPO. We classify these accruals into 32 types over a 21-year span. We show that variation in persistence for the 32 accrual types is consistent with our predictions concerning GAAP rules. We provide a model of accruals and show that it is implausible for estimation error of reasonable magnitudes to explain this variation. Finally, we develop a measure of reporting consistency and show its impact on accrual quality inferences.