A Synthesis of Accrual Quality and Abnormal Accrual Models: An Empirical Implementation
- Authors
- Pae, Jinhan
- Issue Date
- 4월-2011
- Publisher
- CITY UNIV HONG KONG, DEPT ECONOMICS & FINANCE
- Keywords
- Quality of accruals; quality of earnings; operating cash flows; abnormal accruals
- Citation
- ASIA-PACIFIC JOURNAL OF ACCOUNTING & ECONOMICS, v.18, no.1, pp.27 - 44
- Indexed
- SSCI
SCOPUS
- Journal Title
- ASIA-PACIFIC JOURNAL OF ACCOUNTING & ECONOMICS
- Volume
- 18
- Number
- 1
- Start Page
- 27
- End Page
- 44
- URI
- https://scholar.korea.ac.kr/handle/2021.sw.korea/112712
- DOI
- 10.1080/16081625.2011.9720872
- ISSN
- 1608-1625
- Abstract
- Dechow and Dichev's (2002) accrual quality model suggests that the Jones (1991) abnormal accrual model can be improved with the inclusion of past, current, and future operating cash flows. A problem with the empirical implementation of this synthesis is that the augmented accrual model requires future operating cash flow information. I propose an equivalent accrual model that is not subject to the "peek ahead" bias and further takes into account the reversal of past accruals. The proposed model improves the explanatory power of the Jones accrual model and makes a difference in inferences about abnormal accruals of firms with accounting restatements and the market mispricing of abnormal accruals.
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Collections - Korea University Business School > Department of Business Administration > 1. Journal Articles
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