Motivated by voluntary disclosure theory, I examine the relation between innate and discretionary accruals quality (AQ) and management's earnings forecast decisions. I argue that AQ
provides an indication of the quality of managers' earnings-related information, as accruals that are of higher (lower) quality presumably arise from higher (lower) quality information.
Further, I argue that the two components of AQ, innate and discretionary, have opposite relations with information acquisition costs, an important theoretical determinant of disclosure.
Specifically, higher levels of innate AQ suggest managers bear low information acquisition costs, leading to a positive association with forecast activity. Conversely, higher discretionary AQ
indicates greater information acquisition costs, yielding a negative theoretical association with voluntary disclosure. I find evidence consistent with these predictions. Further,
improvements in innate AQ correspond to a higher (lower) likelihood of starting (stopping) a policy of forecasting and increases in forecast frequency, though I find no relation between
changes in discretionary AQ and changes in forecasting policy. Finally, as predicted, innate AQ interacts with several previously identified determinants of forecasting, including
institutional holdings, abnormal audit fees, product market competition, and litigation risk. Overall, my results are consistent with theory suggesting both information quality and
information acquisition costs play important roles in managers' forecasting decisions. / A Dissertation submitted to the Department of Accounting in partial fulfillment of the requirements for the degree of Doctor of Philosophy. / Summer Semester, 2014. / April 25, 2014. / Accruals Quality, Disclosure Costs, Information Quality, Management Forecast, Voluntary Disclosure / Includes bibliographical references. / Frank L. Heflin, Professor Directing Dissertation; Bruce K. Billings, Committee Member; Richard M. Morton, Committee Member; Jeffrey S. Paterson,
Committee Member.
| Identifer | oai:union.ndltd.org:fsu.edu/oai:fsu.digital.flvc.org:fsu_252866 |
| Contributors | Moon, James R. (authoraut), Heflin, Frank L. (professor directing dissertation), Zuehlke, Thomas W. (Thomas William), 1957- (university representative), Billings, Bruce K. (committee member), Morton, Richard M. (committee member), Paterson, Jeffrey S. (committee member), Florida State University (degree granting institution), College of Business (degree granting college), Department of Accounting (degree granting department) |
| Publisher | Florida State University, Florida State University |
| Source Sets | Florida State University |
| Language | English, English |
| Detected Language | English |
| Type | Text, text |
| Format | 1 online resource (96 pages), computer, application/pdf |
| Rights | This Item is protected by copyright and/or related rights. You are free to use this Item in any way that is permitted by the copyright and related rights legislation that applies to your use. For other uses you need to obtain permission from the rights-holder(s). The copyright in theses and dissertations completed at Florida State University is held by the students who author them. |
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