Is Accruals Quality a Priced Risk Factor

By John E. Core, W. Guay, Rodrigo S. Verdi. 2008

442 citations recorded by the source corpus.

Subfields: Accounting, Economics and Econometrics, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/0c8087ef322e691664d5d6abb9974196d4b5c410

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Citations in the corpus

Earnings Smoothness, Average Returns, and Implied Cost of Equity Capital (2010, unknown): “Finally, Core et al. (2008) subject another accounting attribute—accrual quality—to asset-pricing tests and find no evidence that is a separately priced ‘‘risk factor,’’ even though implied cost of capital tests indicate it is.”
The effect of target-firm accounting quality on valuation in acquisitions (2014, unknown): “2 Prior research has examined the use of accounting information by investors (Cohen 2003; Francis et al. 2005; Core et al. 2008) and by lenders (Biddle and Hilary 2006), as well as a firm’s use of its own accounting information in compensation (Peng 2007) and capital investment decisions (Biddle et…”
Does Information Asymmetry Matter to Equity Pricing? Evidence from Firms’ Geographic Location (2010, unknown): “(2007); and Core et al. (2008).”
How Does Financial Reporting Quality Relate to Investment Efficiency (2009, unknown): “The first measure, accruals quality (AQ), is derived from prior work (Dechow and Dichev, 2002; McNichols, 2002) and has been used extensively in the prior literature (e.g., Aboody et al., 2005; Francis et al., 2004, 2005; Core et al., 2008).”
Do the Big 4 and the Second-tier firms provide audits of similar quality? (2010, background): “Both Francis et al. (2005) and Core et al. (2008) find accrual quality to be priced in the ex ante cost of equity capital.”
Direct and Mediated Associations among Earnings Quality, Information Asymmetry, and the Cost of Equity (2012, methodology): “Innate earnings quality is the fitted value from a regression of total earnings quality on innate factors identified by Dechow and Dichev (2002) and Francis et al. (2005). Discretionary earnings quality is the residual from the same regression.”
Financial Crisis And Earnings Management: The European Evidence (2014, background): “Some recent studies (e.g. Chen et al., 2011; Kim and Qi 2010; Core et al., 2008; Jones et al., 2008) apply this model to assess accruals as a measure of earnings quality, arguing that accruals are temporary adjustments made to better measure firm performance.”
Does Earnings Quality Affect Information Asymmetry? Evidence from Trading Costs*: Earnings Quality and Information Asymmetry (2013, unknown): “However, Core, Guay, and Verdi (2008) show that the pricing effect of accruals/earnings quality documented in FLOS (2005) is not robust.”
Global Accounting Convergence and the Potential Adoption of IFRS by the United States: An Analysis of Economic and Policy Factors (2009, background): “…quality and firms' costs of capital (e.g., Botosan, 1997; Botosan and Plumlee, 2002; Hail, 2002; Francis et al., 2004 and 2005; Hail and Leuz, 2006; Leuz and Schrand, 2008), although some of the evidence is still debated (e.g., Leuz and Wysocki, 2008 Liu and Wysocki, 2007; Core et al., 2008).”