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- Title
A Market-Based Evaluation of Discretionary Accrual Models.
- Authors
Guay, Wayne R.; Kothari, S. P.; Watts, Ross L.
- Abstract
The article reports on the market-based evaluation of discretionary accrual models in the U.S. The study examined uses a simple earnings model on 5 discretionary accrual models to develop a managerial discretion hypothesis which assumes an efficient market. Discretionary accruals can aid managers in producing reliable and timely measures of a firm's financial performance. Opportunistic accrual management is used to hide poor performance or slow down uncommonly good earnings until future earnings periods.
- Subjects
UNITED States; ACCRUAL basis accounting; ACCOUNTING methods; CASH basis accounting; CASH flow; FINANCIAL performance
- Publication
Journal of Accounting Research (Wiley-Blackwell), 1996, Vol 34, Issue 3, p83
- ISSN
0021-8456
- Publication type
Article
- DOI
10.2307/2491427