We examine the impact of managerial financial reporting incentives on accounting quality changes around International Financial Reporting Standards (IFRS) adoption. A novel feature our single-country setting based Germany is that voluntary IFRS adoption was allowed and common before became mandatory. exploit revealed preferences in choice to (not) adopt voluntarily determine whether management individual firms had IFRS. For comparability with previous studies, we assess through multiple...

In this paper, we analyze differences in the timeliness of income recognition between U.S. and U.K. GAAP financial reporting regimes. Building on previous work area focus links current reported earnings past changes market value. light Basu [1997] present a formal model which response to value varies according whether change is good news or bad. This yields number insights with regard definition measurement conservatism. We also report evidence indicating that controlling for...

A definition of perturbations space-times in general relativity is proposed. The leads a natural way to concept gauge invariance, and an extension lemma Sachs (1964). Coupled equations governing linearized certain tetrad components scalar, electromagnetic, gravitational fields are derived by the use Geroch, Held & Penrose’s (1973) version formalism Newman Penrose (1962). It shown that these invariant if only unperturbed space-time vacuum algebraic type {22} or, equivalently, perturbation...

We discuss a type-{22} solution of the Einstein-Maxwell equations which represents field uniformly accelerating charged point mass. It contains three arbitrary parameters $m$, $e$, and $A$, representing mass, charge, acceleration, respectively. The is direct generalization Reissner-Nordstrom general relativity Born classical electrodynamics. external "mechanical" force necessary to produce acceleration appears in form timelike nodal two-surface extending from particle's world line infinity....

The article reviews the recent academic research literature on earnings management (EM) with a view to identifying themes and results of interest users preparers financial statements, accounting standard setters, others responsibility for ensuring that companies provide information shareholders can be relied upon. Hopefully students an in exploring EM will find provides useful framework. this topic is vast, it not possible cover every detail. I impressionistic survey highlights examples...

This paper adopts a structured positive approach to explaining the valuation practices of financial analysts by studying methodologies contained in 104 analysts' reports from international investment banks for 26 large U.K.-listed companies drawn beverages, electronics, and pharmaceuticals sectors. We provide descriptive analysis use alternative models focusing on value-relevant attributes that seek forecast convert forecasts into estimates firm value. postulate test number hypotheses...

In this study we compare the timeliness and conservatism of reported earnings across U.S. U.K. GAAP regimes. We present a theoretical model differential speeds recognition good news bad news. This suggests informative relatively robust ways measuring dimensions in income recognition. The analysis shows importance distinguishing between delays reporting early news, when comparing Empirical results suggest that treatment extraordinary items is important assessing relative conservatism. degree...

Abstract The paper presents a new methodology for evaluating corporate voluntary disclosures in the annual report discussion section. Based on dataset of electronic reports and standard text analysis software package, we text-search large number at minimal (marginal) cost. resulting sample sizes are comparable to those employed studies based AIMR-FAF database. A major advantage our scoring system is that it adaptable particular requirements research project. We demonstrate importance this...

Abstract We extend the prior literature on biased disclosure decisions by examining whether, when and how managers bias tone of forward‐looking narratives. In order to measure we employ techniques manual content analysis aggregate positive, neutral negative statements into an overall tone.We then analyse frequency positive for firms with large impending year‐on‐year changes in sales operating profit margin, regress cross‐sectionally four managerial incentive variables that are unrelated...

Abstract We examine whether UK firms engage in earnings management or forecast guidance to ensure that their reported meet analyst expectations. explore two mechanisms: (a) positive abnormal working capital accruals; and (b) classification shifting of core expenses non‐recurring items. find no evidence a association between income‐increasing, accruals the probability meeting forecasts. Instead we consistent with subset larger small other items just hit expectations earnings. also increases...

ABSTRACT We examine whether earnings reconciliation from U.K. generally accepted accounting principles (GAAP) to International Financial Reporting Standards (IFRS) convey information. As a result of debt contracting, mandatory changes are expected affect the likelihood violating existing covenants based on rolling GAAP, leading redistribution wealth between shareholders and lenders. Consistent with this prediction, we find significant market reactions IFRS announcements. These more...

We examine the impact of managerial financial reporting incentives on accounting quality changes around International Financial Reporting Standards (IFRS) adoption. A novel feature our single-country setting based Germany is that voluntary IFRS adoption was allowed and common before became mandatory. exploit revealed preferences in choice to (not) adopt voluntarily determine whether management individual firms had IFRS. For comparability with previous studies, we assess through multiple...

Abstract: This study explores the market response to achieving analyst earnings expectations, distinguishing between expectations achieved through forecast guidance and management. We consider three management tools: real management, working capital accruals classification shifting. Analysis indicates that UK firms use shifting achieve expectations. The does not reward guidance, achievers shift receive a lower than genuine achievers. aligns with information on future profitability rational...

Abstract We investigate the joint effects of dividend propensity (i.e. whether a firm pays cash dividends) and voluntary disclosure on relationship between current stock returns future earnings. examine act as substitutes or complements in financial communication process. also vary high‐ lowgrowth firms. Consistent with prior studies, we find that share price anticipation earnings improves increasing levels annual report narrative disclosure, firms pay dividends exhibit higher than...

This paper provides a commentary on the academic literature accounting conservatism with view to highlighting insights of that are potentially useful for standard setters. We begin by introducing basic concepts focusing distinction between conditional and unconditional conservatism. then briefly discuss objectives financial reporting economics information, paying particular attention role stewardship in Conceptual Framework, economic adverse selection moral hazard. The two middle sections...

ABSTRACT Using an international sample of 16 countries, this paper examines if analyst- and country-specific characteristics explain the variation in target price (TP) accuracy. We find that significant average TP accuracy across countries is due to differences accounting disclosure quality, origin legal system, cultural traits, IFRS regulation. also analysts exhibit differential persistent ability forecast prices accurately, which confirms some have superior forecasting ability. Data...

Abstract We critically assess mainstream accounting and finance research applying methods from computational linguistics (CL) to study financial discourse. also review common themes innovations in the literature incremental contributions of studies CL over manual content analysis. Key conclusions emerging our analysis are: (a) is behind curve terms generally word sense disambiguation particular; (b) implementation issues mean proposed benefits are often less pronounced than proponents...

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