sophisticated market participants who have the ability to see through accrual earnings management choices, we predict and find that …, when reporting is transparent, managers are more likely to use real earnings management (REM) relative to accrual earnings …

Recent work shows that the role of accrual accounting in mitigating the timing differences between cash flows and … noise in the accrual accounting process, sophisticated users of financial information – financial analysts, are able to … extract useful information from the reported accrual accounting process, and use them in their forecasting process, are able …

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 … matched non-IPO firms. These results challenge the view that IPO firms understate receivables-related accrual accounts …

transitory negative accrual items. A direct implication of asymmetrically timely loss recognition is asymmetry in the persistence … of accruals depending on whether the firm experiences a gain or a loss in the current year: accruals should be less … persistent for loss years relative to profit years. If investors naively fixate on total earnings, however, conditional …