Essay 1. Accrual Effect in Stock Returns: Earnings Management or Sluggish Market Reactions? Essay 2. The Accrual Effect on Future Earnings

In the second essay, I examine the accrual effect on future earnings and measure the potential economic consequence of earnings management. I find that the aggregate future earnings, on average, will be impaired by $0.20 in the long-run for an $1 increase of current accruals. This negative accrual effect is more significant for firms with high price-earnings, market-to-book and high accruals where earnings management is likely to occur. Incorporating the accrual effect is useful in improving the accuracy of earnings forecasts for these firms. Accordingly, the empirical results are consistent with the notion that earnings management causes the negative relationship between accruals and future earnings.

Name thesis:degree_name

Ph.D.

Level thesis:degree_level

Dissertation

Discipline thesis:degree_discipline

Finance

Grantor

University of Illinois at Urbana-Champaign

Year dc:date

2015

Author dc:creator

• Chan, Konan

Contributors dc:contributor

• Narasimhan Jegadeesh

• Business Administration, Accounting

Language dc:language

eng

Identifier

(MiAaPQ)AAI9955598

OAI identifier oai:identifier

oai:www.ideals.illinois.edu:2142/87450