Corporate accruals quality during the 2008–2010 Global Financial Crisis

Arthur, Neal; Tang, Qingliang; Lin, Zhiwei

doi:10.1016/j.intaccaudtax.2015.10.004

Cited by 61 publications

(71 citation statements)

References 49 publications

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“…They find, during the crisis, most of EQ proxies improved. Using a sample of European countries, both Filip and Raffournier (2014) and Arthur et al (2015) find a significant increase in EQ during the crisis period compared to the pre-crisis period.…”

Section: Literature Reviewmentioning

confidence: 97%

Accruals quality and the cost of debt: the European evidence

Eliwa

Gregoriou

Paterson³

2019

IJAIM

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Purpose-This paper aims to investigate the empirical relationship between the cost of debt (CoD) and accruals quality (AQ) of European listed firms during the period of 2005 to 2014. Also, it aims to test the impact of the interrelationship between the financial crisis (2008-2009) and AQ on CoD. Finally, we decompose AQ into two components; the innate (InnateAQ) and discretionary components (DiscAQ) and test their relationships with CoD. Design/methodology/approach-To empirically examine the relationship between AQ and CoD, a sample including 15-member states of the EU is constructed. AQ proxy is based on the McNichols (2002) modification of Dechow and Dichev (2002) model. A univariate analysis and a multivariate analysis are conducted to examine the relationship between AQ and CoD after controlling for firm characteristics and institutional variables. Findings-We find a significant negative association between AQ and CoD in a vast proportion of the 15 countries under review. Also, the results indicate that during the crisis period, creditors pay relatively more attention to the quality of accounting information than during the pre-crisis period when they determine CoD of firms. Moreover, we report a link between the magnitude of this relationship and national characteristics and provide evidence of the significant effects of national characteristics and market forces on the CoD. Finally, we find that the InnateAQ drives the relationship with CoD. Practical implications-This paper provides up-to-date evidence of the economic consequences of IFRS and AQ. The results should, therefore, be of interest to managers, creditors, regulators and standard-setters. Originality/value-To the best of our knowledge, this is the first study to investigate the effects of AQ on CoD for European listed firms. Also, it is the first to examine the impact of financial crisis on the association between AQ on CoD.

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Section: Literature Reviewmentioning

confidence: 97%

Accruals quality and the cost of debt: the European evidence

Eliwa

Gregoriou

Paterson³

2019

IJAIM

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“…The presence of big bath practices can explain this unanticipated relationship, and suggests opportunistic behaviors in the absence of these auditors. Artur, Tang, and Lin (2015) analyzed the use of discretionary accruals, including Imp_GW, as an earnings management tool and also observed this negative relationship.…”

Section: Results Of the Estimated Modelsmentioning

confidence: 97%

Big bath and goodwill impairment

Gonçalves

Ferreira

Rebelo

et al. 2019

RBGN

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Purpose -To analyze the extent to which recognition of impairments in goodwill is associated with periods of negative results before these losses (big bath practices). To determine whether indebtedness and the capital market restrict the recognition of such losses in big bath practices.Design/methodology/approach -Quantitative empirical study based on accounting and market data of companies listed on the Lisbon and Madrid stock exchanges (2007)(2008)(2009)(2010)(2011)(2012)(2013)(2014)(2015), supported by multivariate regression models estimated using the generalized moments method (system GMM).Findings -Impairment in goodwill is relevant in big bath practices, and there is great discretion in the use of this accrual. It can be concluded that companies adjust to capital market cycles. The positive relationship between the level of indebtedness and the impairment in goodwill suggests that any penalties from creditors do not condition the recognition of the impairments.Originality/value -There is evidence of big bath practices being associated with companies with negative results and of the role of debt and capital markets as explanatory factors of big bath strategies that use impairments in goodwill.

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“…Furthermore, reducing real earnings management practices contributes to increase the performance of Egyptian companies and thus increasing the trust of various stakeholders. Graham, et al, 2005;Cohen & Zarowin, 2010;Burnett, et al, Arthur, et al, 2015;Uwuigbe, et al, 2015;Batool, et al, 2017 ‫األخخى‬ ‫اسات‬ ‫الجر‬ ‫بعس‬ ‫نتائج‬ ‫تػصمت‬ ‫بيشسا‬ ، ً ‫ايجابيا‬ ً ‫ا‬ ‫تأثيخ‬ ‫وجػد‬ ‫إلى‬ ) ( Rusmin, 2010;Sun, et al, 2014;Hsu & Wen, 2015 ( Chen, et al, 2010;Al-shattarat, 2017;Jiang, et al, 2018 ) ‫عغ‬ ‫األخخى‬ ‫اسات‬ ‫الجر‬ ‫بعس‬ ‫نتائج‬ ‫تػصمت‬ ‫بيشسا‬ ، ً ‫ايجابيا‬ ً ‫ا‬ ‫تأثيخ‬ ‫وجػد‬ ( ‫حساد،‬ 2117 Wang, 2014;Cupertino, et al, Herrmann, et al, 2003;Roychowdhury, 2006;Yuanhui, et al, Burnett, et al, 2012) 6) 3 6 ‫عغ‬ ‫لإلفراح‬ ‫باح‬ ‫األر‬ ‫ة‬ ‫إدار‬ ‫لسسارسات‬ ‫ة‬ ‫اإلدار‬ ‫تمجأ‬ ‫قج‬ ‫حيث‬ ‫باح،‬ ‫األر‬ ‫ار‬ ‫استقخ‬ ‫عمى‬ ‫السحافطة‬ ‫االيجابية‬ ‫باح‬ ‫األر‬ ( Roychowdhury, 2006;Osma, 2008 ) ‫تقمبات‬ ( Graham, et al, 2005;Jong, et al, 2014 ) Graham, et al, 2005;Cohen & Zarowin, 2010;Burnett, et al, 2012 ( Chen, et al, 2007;Alves, 2012 ) 6 ‫اسة‬ ‫در‬ ‫استيجفت‬ ‫فقج‬ ‫الدياق‬ ‫ىحا‬ ‫وفى‬ ( Hsu & Koh, 2005 ) ‫السمكية‬ ( Chen, et al, 2005;Hoitash, et al, 2007 ) ‫اليامة‬ Lemma, et al, 2018;Sarkar, et al, 2008;Siregar & Utama...…”

Section: Introductionmentioning

confidence: 99%

اثر خصائص الوحدة الاقتصادیة على ممارسات ادارة الارباح بالتنشطة الحقیقیة وانعکاساتها على الاداء التشغیلى المستقبلى دراسة تطبیقیة

حمودة¹

2019

المجلة العلمیة للبحوث التجاریة

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Corporate accruals quality during the 2008–2010 Global Financial Crisis

Cited by 61 publications

References 49 publications

Accruals quality and the cost of debt: the European evidence

Accruals quality and the cost of debt: the European evidence

Big bath and goodwill impairment

اثر خصائص الوحدة الاقتصادیة على ممارسات ادارة الارباح بالتنشطة الحقیقیة وانعکاساتها على الاداء التشغیلى المستقبلى دراسة تطبیقیة

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