The paper provides a broad discussion of the topic “accruals”. Though much of what is said is familiar from the literature on accruals, the paper tries to develop concepts and show how theses forge tight links across a variety of themes. The starting point of the analysis concerns the...

OLS-based archival accounting research encounters two well-known problems. First, outliers tend to influence results excessively. Second, heteroscedastic error terms raise the spectre of inefficient estimation and the need to scale variables. This paper applies a robust estimation approach due...

We empirically examine the profitability of leading Chinese firms, benchmarked against comparable US firms, for the period 2005-13. Return on invested capital (ROIC), which excludes leverage effects on performance, provides the primary metric. Averaged over firms and years, the two sets of firms...

This paper examines three basic equity valuation concepts: (i) Residual Income Valuation (RIV); (ii) in the spirit of Miller-Modigliani, the irrelevance of a firm's dividend payout policy; (iii) betas/CAPM, to quantify risk and capitalization factors. As a first cut, results show that RIV,...

The paper discusses two issues related to “growth”. Both have arguably not been dealt with adequately in the literature. The first concerns growth and accruals. Research practice combines two components of accruals, asset accruals and liability accruals. This simplification causes problems...

This paper concerns potential disparities between narratives and statistical evidence in empirical accounting research. We focus on the extent to which a regression model's main variable of interest contributes incrementally to the explanation of the dependent variable. We replicate ten recently...

We dissect the portion of stock price change of the fiscal year that is recognized in reported accounting earnings of the year. We call this portion earnings recognition timeliness (ERT). The emphasis in our dissection is on empirical identification of two fundamental precepts of financial...

A vast literature following Hayn [1995] and Burgstahler and Dichev [1997] attributed the so-called 'discontinuities' in earnings distributions around zero to earnings management. Despite recent evidence that these discontinuities are likely caused by other factors, researchers and teachers...