More specifically, the findings indicate that governments tend to increase these discretionary accruals if they can be absorbed by a surplus.
In fact, in a later paper (Anessi-Pessina et al, 2008) they show that the adoption of an integrated system of accruals and budgetary accounting is influenced by such "cultural" variables as the perceptions of Chief Financial Officers and geographical location.
Effects of budgetary and accruals accounting coexistence: evidence from Italian local governments.
(3) We perform independent sorting on both total accruals and firm size.
Richardson, Sloan, Soliman and Tuna (2005) show that mispricing is strongest for the least persistent accruals. Shi and Zhang (2012) find that firms with the least persistent accruals relative to cash flows exhibit the greatest mispricing.
stock market, the earnings fixation hypothesis must be able to provide evidence that sophisticated investors do not understand accruals. There is some prior research that suggests that sophisticated investors, as well as the market as a whole, do not fully understand accruals (Bradshaw, Richardson and Sloan 2001; Bhojraj and Swaminathan 2009 and Xu 2010).
Accruals accounting in the public sector: A road not always taken.
Accrual practices and reform experiences in OECD countries results of the 2016 OECD accruals survey.
In this article, we examine whether accruals quality is related to a firm's financial strength rating.
In addition, prior studies find evidence that insurers can use discretionary accruals in an attempt to mask solvency issues (e.g., Petroni, 1992; Gaver and Paterson, 2004; Grace and Leverty, 2012).
In such cases, the increase of the accruals is due to signaling the market and reduces the information asymmetries.
Most of the researches done by Barth, Chang & Scaffer, Alatar et al in the area of predicting future cash flow, show that profit is the better predictor than operational cash flow and also accounting profit has a greater role than operational cash flow in explanatory stock returns and accruals flow has more power than cash flow for predicting future cash.