Review of Accounting Studies

, Volume 13, Issue 1, pp 23–54

An integrated analysis of the association between accrual disclosure and the abnormal accrual anomaly

Article

DOI: 10.1007/s11142-007-9038-z

Cite this article as:
Louis, H., Robinson, D. & Sbaraglia, A. Rev Acc Stud (2008) 13: 23. doi:10.1007/s11142-007-9038-z

Abstract

We find no evidence of accrual mispricing for firms that disclose accrual information at earnings announcements. For these firms, the market differentiates the discretionary from the nondiscretionary components of the earnings surprise. In contrast, the market fails to distinguish between the discretionary and the nondiscretionary components of the earnings surprise for firms that do not disclose accrual information at earnings announcements. These firms experience some stock price correction around the filing date. However, the correction is only partial, resulting in a post-filing drift.

Keywords

Discretionary accruals ERC SEC filing Disclosure Mispricing 

JEL Classifications

G12 G14 M14 M43 

Copyright information

© Springer Science+Business Media, LLC 2007

Authors and Affiliations

  • Henock Louis
    • 1
  • Dahlia Robinson
    • 2
  • Andrew Sbaraglia
    • 1
  1. 1.Smeal College of BusinessPenn State UniversityUniversity ParkUSA
  2. 2.W. P. Carey School of BusinessArizona State UniversityTempeUSA

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