The Relationship between Accruals Quality, Earnings Persistence and Accruals Anomaly in the Canadian Context

Boubakri, Fatma

doi:10.5539/ijef.v4n6p51

Cited by 3 publications

(3 citation statements)

References 32 publications

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“…However, there are some limitations in this study, First of all, our sample includes 20 firm-observations from the financial industry, while most of the prior studies exclude such firms (with a four-digit Standard Industrial Classification (SIC) between 6000 and 6999) because it is difficult to calculate the discretionary accruals for this category of firms (van Tendeloo & Vanstraelen, 2005;van der Poel & Vanstraelen, 2011;Boubakri, 2012). However, only 20 of our 3049 firm-observations are from the financial industry.…”

Section: Conclusion Limitations and Recommendationsmentioning

confidence: 99%

The Impact of IFRS Adoption on Earnings Quality: A Study Conducted on Foreign Issuers in the United States

Besten¹,

Γεωργακόπουλος²,

Vasileiou³

et al. 2015

IBR

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The worldwide adoption of International Financial Reporting Standards (IFRS) is affecting many countries around the globe as it has become widely spread. Since 2007 the United States (US) allows foreign issuers to voluntarily adopt IFRS. This paper investigates the effect of IFRS adoption on earnings quality after voluntary IFRS adoption was allowed to foreign issuers in the US. More precisely, the discretionary accruals and the small positive earnings are tested for a sample of foreign issuers in the US that are registered and reporting with the SEC, comparing a pre-period from 2002 to 2006 with a post-period from 2008 to 2011. The results from the difference-in-differences regression analysis suggest that in terms of discretionary accruals there is no statistical difference between the pre-IFRS and the post-IFRS period, therefore the earnings quality remains the same. For small positive earnings it is found that, when foreign issuers incorporate IFRS, these are lower, indicating higher earnings quality.

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Section: Conclusion Limitations and Recommendationsmentioning

confidence: 99%

The Impact of IFRS Adoption on Earnings Quality: A Study Conducted on Foreign Issuers in the United States

Besten¹,

Γεωργακόπουλος²,

Vasileiou³

et al. 2015

IBR

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“…When investors evaluate the company's future in investment decisions, accounting information plays an important role in this assessment. Thus, considering the major role of capital in the economy of any country, it is necessary that investors be aware of the financial information of the companies to lead to good investment in the capital market and optimal allocation of resources on the capital market (Boubakri, 2012). For financial analysts to able to successfully predict future performance, there is a need for financial statements particularly accounting earnings.…”

Section: The Concept Of Value Relevancementioning

confidence: 99%

Value Relevance (VR), Earnings Management and Corporate Governance System

Dowlatabadi¹,

Filsaraei²

2016

ijafr

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Today, to make investment decisions, investors analyze the stock in the stock market and an information source used by them is the financial report of the related firms. In some cases, the report may be prepared in accordance with management policies, which is known as an earnings management. Earnings management will affect intelligence value and consequently have negative impact. Due to these issues, in this study, the relationship between VR of earnings, earnings management and corporate governance is discussed. Using a sample of listed companies in Tehran Stock Exchange and the regression model, the results showed that the ownership of institutional investors has reduced the earnings management, but compared to major shareholders and company's audit by the National Audit Office, it has increased earnings management. The results also show that there is no significant relationship between management and the stock price as an indicator of measuring the VR of earnings.

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“…Furthermore, evidence from Sloan (1996); Richardson et al (2005); Dechow &Ge ( 2006) shows that accrual accounting contributes to the observed decline in earnings persistence such that accrual component of earnings is less persistence of earnings than the persistence of cash flows The studies by Sloan (1996); Richardson et al (2005); Oei, Ramsay & Mather, 2008;Boubakri, (2012); Chen &Shane (2014) further reveal that accrual leads to low persistence of earnings but does not lead to low persistence of cash flows component of earnings. It is reported that the ability of cash flows to predict future earnings is higher than accrual earnings.…”

Section: Literature Reviewmentioning

confidence: 99%

Earnings persistence of Nigerian listed banks

Abogun

Olaniyi

Ijaiya

et al. 2020

JSB

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Banks report huge profits yearly yet some of these banks were reported to lack capital adequacy and some were reported to be close to being insolvent. Therefore, it is important to determine whether or not the profits reported by these banks are persistent. As a result, the main objective of this study is to examine the persistence of earnings of Nigerian listed banks. The explanatory research design was adopted and data were gathered from the secondary source, specifically from the financial statements of Nigerian quoted banks. The entire fifteen (15) quoted deposit money banks which constitute the population of the study was examined over a period of eleven (11) years spanning 2005 to 2015. In this study, the Generalized Method of Moments (GMM) dynamic panel estimation technique was employed. The study found that the earnings of the Nigerian listed banks are less persistent, that is, less sustainable. It is therefore recommended that investors should exercise caution by paying less attention to reported earnings. Instead, effort should be made to determine the persistent level of earnings to avoid wrong investment decisions.

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The Relationship between Accruals Quality, Earnings Persistence and Accruals Anomaly in the Canadian Context

Cited by 3 publications

References 32 publications

The Impact of IFRS Adoption on Earnings Quality: A Study Conducted on Foreign Issuers in the United States

The Impact of IFRS Adoption on Earnings Quality: A Study Conducted on Foreign Issuers in the United States

Value Relevance (VR), Earnings Management and Corporate Governance System

Earnings persistence of Nigerian listed banks

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