Title: Discretionary Accrual Models and the Accounting Process
Abstract:This paper introduces a discretionary accrual model based on the accounting process developed by Dechow, Kothari and Watts (1998). Our model tries to prevent a big proportion of nondiscretionary accru...This paper introduces a discretionary accrual model based on the accounting process developed by Dechow, Kothari and Watts (1998). Our model tries to prevent a big proportion of nondiscretionary accruals from being judged as discretionary. Using data from the Japanese stock market, we find that our model fits accruals much better than versions based on Jones (1991). Evidence in this paper shows that our model may modify the findings of previous research in two areas: 1) studies that use the versions of Jones model to detect earnings management and 2) studies that analyze the relation between discretionary accruals and future performance or the relation between discretionary accruals and stock returns.Read More
Publication Year: 2000
Publication Date: 2000-01-01
Language: en
Type: article
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Cited By Count: 4
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