The earnings quality and information processing effects of accounting consistency
Peterson, Kyle
The earnings quality and information processing effects of accounting consistency / Kyle Peterson, Roy Schmardebeck & T. Jeffrey Wilks . -- Páginas 2483 a la 2514
Reseña : We specify measures of accounting consistency both across time and across firms based on the textual similarity of accounting policy footnotes disclosed in 10-K filings. We first examine how these measures relate to earnings quality. Accounting consistency over time is positively associated with a number of earnings quality proxies, including earnings persistence, predictability, accrual quality, and absolute discretionary accruals. We also find that lower consistency relative to other firms in the industry is associated with larger absolute accrual model residuals. Finally, we examine the information processing effects of accounting consistency. We find that greater accounting consistency in the time-series and the cross-section is associated with lower information asymmetry, as proxied by bid-ask spread and illiquidity. Greater cross-sectional consistency is also associated with greater analyst coverage, more accurate analyst forecasts, decreased dispersion in analyst forecasts, and stronger stock return synchronicity..
Contabilidad--Legislación--Estados Unidos--Publicaciones seriadas
Pronóstico de la economía--Estados Unidos--Publicaciones seriadas
Schmardebeck, Roy ; Wilks, T. Jeffrey ;
The earnings quality and information processing effects of accounting consistency / Kyle Peterson, Roy Schmardebeck & T. Jeffrey Wilks . -- Páginas 2483 a la 2514
Reseña : We specify measures of accounting consistency both across time and across firms based on the textual similarity of accounting policy footnotes disclosed in 10-K filings. We first examine how these measures relate to earnings quality. Accounting consistency over time is positively associated with a number of earnings quality proxies, including earnings persistence, predictability, accrual quality, and absolute discretionary accruals. We also find that lower consistency relative to other firms in the industry is associated with larger absolute accrual model residuals. Finally, we examine the information processing effects of accounting consistency. We find that greater accounting consistency in the time-series and the cross-section is associated with lower information asymmetry, as proxied by bid-ask spread and illiquidity. Greater cross-sectional consistency is also associated with greater analyst coverage, more accurate analyst forecasts, decreased dispersion in analyst forecasts, and stronger stock return synchronicity..
Contabilidad--Legislación--Estados Unidos--Publicaciones seriadas
Pronóstico de la economía--Estados Unidos--Publicaciones seriadas
Schmardebeck, Roy ; Wilks, T. Jeffrey ;