We examine whether initial public offering (IPO) firms exercise discretion over an individual accrual account on the balance sheet - the allowance for uncollectible accounts - and an individual accrual account on the income statement - bad debt expense. Our research design exploits a unique...

We seek evidence of a link between accruals-based earnings quality (EQ) and cost of capital by examining two classes of shares traded in China's segregated markets during 1995-2000. The A- and B-shares introduced respectively for domestic and foreign investors carry identical cash flow rights,...