A presente pesquisa foi desenvolvida com o objetivo de avaliar a capacidade dos investidores em interpretar os dados emanados pela Contabilidade; mais especificamente, analisou sua habilidade em compreender informações relativas ao lucro. De forma complementar, buscou analisar a existência de oportunidades de obtenção de ganhos econômicos por intermédio da adoção de estratégias de investimento com base em informações relativas aos accruals. A amostra compreendeu empresas não financeiras para as quais o banco de dados Economática dispunha de informações relativas ao período de 1995 a 2010. Foram descartadas da amostra as empresas com patrimônio líquido negativo, companhias com dados faltantes (missings), bem como observações com comportamento distinto dos demais (outliers). Por conta do baixo impacto dos números contábeis no mercado de capitais brasileiro detectado por Lopes (2005) esperava-se uma baixa presença da anomalia dos accruals no mercado de capitais brasileiro. Isso porque, países em que a importância dos lucros para os preços de mercado é reduzida, a precificação de ações seria menos influenciada pela fixação funcional no lucro final reportado o que, por sua vez, provocaria interferências na anomalia dos accruals (EL MEHDI, 2011). Para avaliar se a persistência dos componentes dos accruals era significativamente inferior aos componentes de fluxos de caixa, estimou-se uma regressão com dados em painel, na qual foi possível comprovar a hipótese de que os ajustes do regime de competência exibem uma menor persistência, com um parâmetro padronizado e estatisticamente significativo na regressão estimada de 0,43, enquanto os componentes de fluxos de caixa apresentaram um parâmetro de 0,53. A falta de significância estatística entre os accruals correntes e retornos anormais futuros das companhias estudadas, bem como, da ausência de retornos anormais significativos de estratégias baseadas em accruals demonstraram que uma baixa qualidade dos lucros correntes - devido a um alto nível de accruals - não resultou em retornos anormais negativos no período posterior. As proxies relativas a adoção das normas IFRS (International Financial Reporting Standards) e ao nível de investimentos - incluídas no modelo de regressão - compreendem parte das contribuições deste tralho, ainda que não se tenha identificado significância estatística para tais variáveis. Isso porque, por intermédio do teste-t, foi explicitada a ocorrência de uma relação entre o nível de acrruals e o crescimento do imobilizado. Tal resultado sugere indícios de que ambas as variáveis captariam o mesmo efeito, qual seja, a atividade investimento por parte das firmas (WEI; XIE, 2007; ZACH, 2007). Os resultados coadunam com as evidências detectadas por Cupertino (2010), ampliando os indícios sobre o comportamento do mercado frente a informações emanadas pela Contabilidade em mercados emergentes, além de explicitar a ausência da denominada anomalia dos accruals no mercado de capitais brasileiro. / This research was developed to evaluate investors\' ability to interpret Accounting data, more specifically, to examine its ability to effectively understand earnings information. As a complement, we have analyzed the existence of economic opportunities to obtain abnormal returns through investment strategies based on accruals. The sample was composed by nonfinancial companies with available information in Economatica database from 1995 to 2010. We\'ve excluded firms with negative equity, missing data, as well as outliers. In countries in which profits importance to market price is lower, pricing of shares would be less influenced by the bottom line functional attachment, which in turn, would decrease the Accruals Anomaly (El MEHDI, 2011). Since Accounting numbers in Brazilian stock market have demonstrated low impact (LOPES, 2005) we previously expect a lower presence of the Accrual Anomaly. To assess whether persistence of accruals was significantly lower than cash flow component, we\'ve estimated a panel data regression, in which it was possible to prove our first hypothesis, that accrual\'s exhibit a lower persistence with a 0.43 estimated parameter, while the cash flows have presented a 0.53 parameter, both significantly different from 0 at the 0.05 level. The lack of statistical significance between current accruals and future abnormal returns among studied companies and the absence of significant abnormal returns in strategies based on accruals have demonstrated that a low quality of current earnings - due to a high level of accruals - did not result in a negative abnormal return, thereafter. Adding proxies to IFRS adoption and investment level can be considered as an additional contribution. Although these variables have shown no statically significance, we\'ve found a relationship, explicit by T-test, between accruals level and inventory growth, providing evidences that both variables would capture the same effect, namely, investments activity by firms (WEIK; XIE, 2007; ZACH, 2007). The results are consistent with Cupertino (2010) research, have increased evidences about market behavior to Accounting information in emerging markets, and explicit the absence of the Accrual Anomaly in Brazilian stock market.

Cash flow prediction is involved in a number of economic decisions, particularly in investment. Previous research conducted in the United States has provided inconsistency in the results of investigating accounting data, cash flow and accrual accounting data in predicting future cash flows. No published research has studied cash flow prediction in Thailand. The current study investigates the ability of accrual and cash flows accounting data to predict future cash flows of Thai listed companies. Three regression models are constructed namely earnings, cash flows, accrual components and cash flows models. In addition, cash flow ratios are investigated to predict future cash flows by using a stepwise regression. Data used in this study is collected from the financial statements of non-financial companies listed on the Stock Exchange of Thailand from 1994 to 2002. Cash flow data are selected directly from the cash flow statements. The empirical results show that past earnings, cash flows, cash flow and accrual component of earnings can be used to predict future cash flows of Thai listed companies and cash flows have better predictive power than past earnings. Additionally, the cash flow model and the cash flow and accrual components of earnings model have better predictive power than the earnings model. The findings of testing the models in an out-of-sample period suggest that the cash flow model is a better predictor of future cash flows than the other models. Furthermore, additional year lags of accounting data can improve the predictive power of the model. However, the results indicate that cash flow ratios are not a good predictor of future cash flows. In addition, this study finds that the Asian economic crisis had an impact on the predictive power of accounting data.

No description available.

The earnings game and myopic performance focus induce managers to use judgment and influence to alter the reported earnings. Earnings management is the umbrella term for such manipulative actions, by accruals management or real activates management. The implicit market reactions by the stock returns indicate the effect of EM and if the behaviors are opportunistic or informative for the stakeholders. Accounting variables explain less of the stock return variation and speculative short-term news drives the variation of stock return. Research Question: Can earnings management indicators improve the forecasting of stock returns? The main purpose of the study is to investigate whether EM can be utilized to forecast returns from improving the forecasting of earnings. The authors will include both AM and RAM measures to investigate the different inherent forecasting abilities, adding to the asset pricing research and valuation area. The authors aim to enhance the explanation of cross-sectional variation of stock returns from accounting variables. The authors aim to develop a model more specified to explain the future stock returns from the accounting relationships. An additional purpose is to include transactions with the firm (stock repurchases) to potentially increase the signaling value of the manipulation behaviors. The theoretical framework consists of a discussion of theories and empirical findings regarding the accounting characteristic and relationship with stock returns. Earnings management is explained in-depth along with the empirical findings related to the concept. The capital market perspective is explained by the efficient market and behavioral finance. The chapter is concluded by concepts explaining the relationship and explanations for earnings management and the impact of information. The sample consists of 3545 firms from NASDAQ and NYSE for the years 1992-2012, which equates to around 40 000 observations. We utilize 11 different EM indicators, constructed to capture abnormal components which indicate manipulative actions. The EM indicators’ association with future stock returns is tested by yearly and industry-yearly firm characteristics framework regressions. The firm characteristic framework is developed to control for firm characteristics and evaluate the standalone effect of EM. The result is expanded by investigating earnings persistence, correlations, robust regression and portfolio sorts. The results suggest that total accruals, discretionary accruals, unexpected core earnings, production cost and stock returns are associated with subsequent stock returns. Abnormal SG&A expenses, Abnormal R&D expenses and abnormal cash flows from operations are not associated with stock returns. Earnings are downward manipulated prior and during stock repurchases. The change in ATO and PM diagnostic captures AM but not RAM. The concluding remarks are that EM indicators are associated with future stock returns and improve the forecasting of stock returns via a more accurate forecast of earnings.

Cash flow prediction is involved in a number of economic decisions, particularly in investment. Previous research conducted in the United States has provided inconsistency in the results of investigating accounting data, cash flow and accrual accounting data in predicting future cash flows. No published research has studied cash flow prediction in Thailand. The current study investigates the ability of accrual and cash flows accounting data to predict future cash flows of Thai listed companies. Three regression models are constructed namely earnings, cash flows, accrual components and cash flows models. In addition, cash flow ratios are investigated to predict future cash flows by using a stepwise regression. Data used in this study is collected from the financial statements of non-financial companies listed on the Stock Exchange of Thailand from 1994 to 2002. Cash flow data are selected directly from the cash flow statements. The empirical results show that past earnings, cash flows, cash flow and accrual component of earnings can be used to predict future cash flows of Thai listed companies and cash flows have better predictive power than past earnings. Additionally, the cash flow model and the cash flow and accrual components of earnings model have better predictive power than the earnings model. The findings of testing the models in an out-of-sample period suggest that the cash flow model is a better predictor of future cash flows than the other models. Furthermore, additional year lags of accounting data can improve the predictive power of the model. However, the results indicate that cash flow ratios are not a good predictor of future cash flows. In addition, this study finds that the Asian economic crisis had an impact on the predictive power of accounting data.

Despite usual onset during adolescence the cause of low bone density in adolescent onset anorexia nervosa is incompletely understood. Puberty is known to be a crucial time for the development of peak bone mass, due principally to growth plate bone formation and modelling on preformed surfaces. This results in bone formation uncoupled from bone resorption leading to increased bone size due to increase in matrix and bone mineral content. It was hypothesized that low bone density in adolescent anorexia nervosa was caused by malnutrition during puberty suppressing normal bone matrix formation at all sites of bone formation thus arresting bone mineralization. Method 49 female adolescents with anorexia nervosa and 109 healthy female adolescent controls were studied. 22 of the anorexia nervosa subjects were studied again a year later. Bone area, mineral content and density were measured using Dual Xray Absorptiometry at the spine, hip and whole body sites, including body composition assessment. Estimated volumetric bone density was calculated using published equations in order to study bone density independent of bone size. Height, weight and Tanner stage in puberty were measured. Dietary intake and physical exercise were assessed using questionnaires. In a subset of anorexia nervosa and control subjects bone age was measured. In a subset of anorexia nervosa subjects bone formation was assessed using serum bone specific alkaline phosphatase and osteocalcin, and bone resorption was assessed using urine N-telopeptide.

Thesis (Ph.D.)--Mississippi State University. Department of Accounting. / Title from title screen. Includes bibliographical references.

This thesis presents two essays on real earnings management and future performance. The first essay draws on empirical studies that examine the three types of real earnings management activities in the United Kingdom (UK) for firms that are more likely to manipulate their earnings to avoid missing earnings targets. These targets include the zero earnings, and last year’s earnings. Also drawing from empirical studies, the second essay investigates the impact of real earnings management on firms’ future operating performance in the UK. In the first essay, I examine earnings management through real activities manipulation by using a sample of UK firms over the period 2009-2013. According to the transaction cost theory and opportunistic perspective of earnings management, the results of the first essay reveal that managers in UK suspect firm-years that manage earnings upward utilise more real earnings management activities to achieve earnings benchmarks opportunistically. Specifically, I find that (1) firms which manage upward earnings have unusually low cash flows from operations by offering price discounts or/and more lenient credit terms to increase sales; (2) firms that manage upward earnings have unusually low discretionary expenditures by cutting/reducing expenditures spending to improve reported margin and (3) firms which manage upward earnings, incur unusually high production costs by producing more products to report lower costs of goods sold in order to achieve their targets. Further, I find evidence that UK firms’ meeting/beating earnings benchmarks around zero earnings and last year’s earnings engage in sales-based manipulation and reducing/cutting discretionary expenses simultaneously; they also engage in overproducing products and reducing discretionary expenses at the same time. Furthermore, I do not find, however, evidence that managers in UK firms are associated with high real earnings management through sales-based manipulation to meet/beat last year’s earnings. On the other hand, I find evidence that manager in UK firms engage in income-increasing earnings management through accounting choice (e.g., accrual-based earnings management) to meet an earnings target. Motivated by agency conflicts of real earnings management (e.g., opportunistic and signalling perspectives), the second essay investigates whether there is an association between UK firms that manipulate their business operations to meet earnings benchmarks (e.g., zero earnings, last year’s earnings) and subsequent operating performance. I implement Fama and MacBeth’s (1973) regression analysis to examine the effects of the magnitude of real earnings management on firms’ future performance. Empirical test results show that manipulation of operating activities such as sales, discretionary expenditures, and production costs to meet earnings benchmarks has a significant positive consequence for firms’ subsequent operating performance and signals firms’ good future performance. Further, I find evidence that firms that manipulate their operating activities in the absence of meeting/beating earnings benchmarks experience a decline in their subsequent operating performance. The findings of this research lend support to our understanding of the process that management follows to evaluate costs and benefits of real earnings management.

Purpose - the purpose of this thesis is to investigate earnings management in an emerging economy without market force. We use discretionary loan loss provisions (DLLP) to proxy earnings management, which constitute a material portion of the total accruals in the banking industry. We examine this abnormal behavior in the financial statements prepared under US GAAP and IFRS. Specifically, we try to find the differences in managerial opportunistic behavior that might exist in the two accounting regimes. We also examine the micro economy and regulatory factors that might influence the earnings behavior in the banks. Design/method/approach - This empirical investigation uses an unbalanced panel data of five commercial banks in Liberia for a period of six years, 2010 to 2012 before and 2013 to 2016 after IFRS adoption. The data generated from the audited financial statements of the commercial banks were analyzed with two sample t test and multiple linear regression. We also run robustness check with same statistical procedures to validate the results. Findings - the empirical results show a statistically insignificant difference in earnings management after the adoption of IFRS, which means the introduction of IFRS did not have significant effect on earnings management practices in the banks. Additionally, we found no significant relationship between Liberia GDP growth and DLLP. Finally, we discovered a positive insignificant relationship between the capital adequacy ratio and DLLP as predicted. Originality/value - the result of this thesis advances the understanding of earnings management under US GAAP and IFRS in an emerging economy. As most of the existing literature conducted on earnings management are mainly focused on developed economy with capital market and data from non-financial institutions. This thesis fills a gap in the existing literature by studying managerial discretion in an unusual environment. The results of our findings inform regulators, investors, auditors and standards setters considering IFRS adoption.

A presente pesquisa foi desenvolvida com o objetivo de avaliar a capacidade dos investidores em interpretar os dados emanados pela Contabilidade; mais especificamente, analisou sua habilidade em compreender informações relativas ao lucro. De forma complementar, buscou analisar a existência de oportunidades de obtenção de ganhos econômicos por intermédio da adoção de estratégias de investimento com base em informações relativas aos accruals. A amostra compreendeu empresas não financeiras para as quais o banco de dados Economática dispunha de informações relativas ao período de 1995 a 2010. Foram descartadas da amostra as empresas com patrimônio líquido negativo, companhias com dados faltantes (missings), bem como observações com comportamento distinto dos demais (outliers). Por conta do baixo impacto dos números contábeis no mercado de capitais brasileiro detectado por Lopes (2005) esperava-se uma baixa presença da anomalia dos accruals no mercado de capitais brasileiro. Isso porque, países em que a importância dos lucros para os preços de mercado é reduzida, a precificação de ações seria menos influenciada pela fixação funcional no lucro final reportado o que, por sua vez, provocaria interferências na anomalia dos accruals (EL MEHDI, 2011). Para avaliar se a persistência dos componentes dos accruals era significativamente inferior aos componentes de fluxos de caixa, estimou-se uma regressão com dados em painel, na qual foi possível comprovar a hipótese de que os ajustes do regime de competência exibem uma menor persistência, com um parâmetro padronizado e estatisticamente significativo na regressão estimada de 0,43, enquanto os componentes de fluxos de caixa apresentaram um parâmetro de 0,53. A falta de significância estatística entre os accruals correntes e retornos anormais futuros das companhias estudadas, bem como, da ausência de retornos anormais significativos de estratégias baseadas em accruals demonstraram que uma baixa qualidade dos lucros correntes - devido a um alto nível de accruals - não resultou em retornos anormais negativos no período posterior. As proxies relativas a adoção das normas IFRS (International Financial Reporting Standards) e ao nível de investimentos - incluídas no modelo de regressão - compreendem parte das contribuições deste tralho, ainda que não se tenha identificado significância estatística para tais variáveis. Isso porque, por intermédio do teste-t, foi explicitada a ocorrência de uma relação entre o nível de acrruals e o crescimento do imobilizado. Tal resultado sugere indícios de que ambas as variáveis captariam o mesmo efeito, qual seja, a atividade investimento por parte das firmas (WEI; XIE, 2007; ZACH, 2007). Os resultados coadunam com as evidências detectadas por Cupertino (2010), ampliando os indícios sobre o comportamento do mercado frente a informações emanadas pela Contabilidade em mercados emergentes, além de explicitar a ausência da denominada anomalia dos accruals no mercado de capitais brasileiro. / This research was developed to evaluate investors\' ability to interpret Accounting data, more specifically, to examine its ability to effectively understand earnings information. As a complement, we have analyzed the existence of economic opportunities to obtain abnormal returns through investment strategies based on accruals. The sample was composed by nonfinancial companies with available information in Economatica database from 1995 to 2010. We\'ve excluded firms with negative equity, missing data, as well as outliers. In countries in which profits importance to market price is lower, pricing of shares would be less influenced by the bottom line functional attachment, which in turn, would decrease the Accruals Anomaly (El MEHDI, 2011). Since Accounting numbers in Brazilian stock market have demonstrated low impact (LOPES, 2005) we previously expect a lower presence of the Accrual Anomaly. To assess whether persistence of accruals was significantly lower than cash flow component, we\'ve estimated a panel data regression, in which it was possible to prove our first hypothesis, that accrual\'s exhibit a lower persistence with a 0.43 estimated parameter, while the cash flows have presented a 0.53 parameter, both significantly different from 0 at the 0.05 level. The lack of statistical significance between current accruals and future abnormal returns among studied companies and the absence of significant abnormal returns in strategies based on accruals have demonstrated that a low quality of current earnings - due to a high level of accruals - did not result in a negative abnormal return, thereafter. Adding proxies to IFRS adoption and investment level can be considered as an additional contribution. Although these variables have shown no statically significance, we\'ve found a relationship, explicit by T-test, between accruals level and inventory growth, providing evidences that both variables would capture the same effect, namely, investments activity by firms (WEIK; XIE, 2007; ZACH, 2007). The results are consistent with Cupertino (2010) research, have increased evidences about market behavior to Accounting information in emerging markets, and explicit the absence of the Accrual Anomaly in Brazilian stock market.