Smoothing Earnings and Earnings Informativenes

Svetoslav Velinov Borisov ()
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Svetoslav Velinov Borisov: Department of Finance, University of Economics – Varna, Bulgaria

Business & Management Compass, 2017, issue 3, 222-235

Abstract: The impact of smoothing earnings over earnings informativeness depends on the reasons for practising it on the part of company management. If smoothing earnings is done for opportunistic purposes, it is expected to reduce earnings informativeness. In contrast, if by means of smoothing earnings the management targets the transmission of internal information about future corporate results, it is expected to increase informativeness. By applying the approach of informativeness following the example of Tucker and Zarowin (2006), this survey examines how smoothing earnings influences earnings informativeness across a sample of Bulgarian public companies.

Keywords: smoothing earnings; informativeness; CKSS approach (search for similar items in EconPapers)
JEL-codes: G14 (search for similar items in EconPapers)
Date: 2017
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