What Determines the Variability of Accounting Accruals?

Zhaoyang Gu (), Chi-Wen Lee () and Joshua Rosett ()

Review of Quantitative Finance and Accounting, 2005, vol. 24, issue 3, 313-334

Abstract: The variability of accounting accruals provides a measure of the normal level of managers’ accounting discretion and has important implications for event studies of earnings management. We examine how this measure is related to the economic factors including both firm characteristics and attributes of the disclosure environment. We show that the variability of accruals is related to firm size, leverage, variability of cash flows, operating cycle, growth, and other factors. Significant industry differences and temporal patterns are also found. Copyright Springer Science + Business Media, Inc. 2005

Keywords: variability of accruals; accounting discretion; earnings management (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (14)

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DOI: 10.1007/s11156-005-6869-1

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