The Impact of Accounting Accruals Before, During, and After an Economic Crisis: Evidence from South Africa

John H. Hall, Elda du Toit and Rudra P. Pradhan ()
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Rudra P. Pradhan: University of Pretoria

The African Finance Journal, 2022, vol. 24, issue 1, 50-64

Abstract: The study investigates the influence of accruals before, during, and after the global financial crisis of 2008. The study confirms findings from previous studies, showing there is a high persistence of earnings and cash earnings are more persistent than accruals. However, the accrual anomaly did not have a consistent effect on share returns over the three periods. During and after the economic crisis, the effect of cash earnings and accruals on total earnings and share price were higher than before the economic crisis. The results show that the accrual component of earnings influences the reliability of future earnings.

Keywords: Value relevance; Accruals; Earnings persistence; Share return; Global economic crisis (search for similar items in EconPapers)
JEL-codes: G01 G17 M41 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:afj:journl:v:24:y:2022:i:1:p:50-64

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