Empirical evidence on cross-country differences in explaining accruals anomaly

This paper examines whether accruals anomaly is related to cross-country factors of the developed stock markets. The paper finds that the extensive use of an accrual accounting system or accounting standards with a spread ownership concentration may impact negatively the accruals anomaly in various countries.The cross-sectional regression reveals that the legal system has no influence in the occurrence of accruals anomaly.Moreover, accruals anomaly is positively affected by the regulations norms.Overall, our results suggest that cross-country differences in the accounting and institutional systems allow for accruals anomaly with prevalence in some countries.