Mouselli, Sulaiman and Jaafar, Aziz and Hussainey, Khaled (2012) Accruals quality vis-à-vis disclosure quality: Substitutes or complements? British Accounting Review, 44 (1). pp. 36-46. ISSN 0890-8389Full text not available from this repository.
The impact of accruals quality and disclosure quality on stock returns is a topical issue in market-based accounting research. Most of the debate is centred on their incremental ability to predict future earnings. Recent studies suggest that higher information risk proxied by either lower accruals quality or lower disclosure quality results in higher stock returns. This paper examines the relationship between accruals quality and disclosure quality, and investigates whether they are complements or substitutes in explaining the time-series variation in portfolio returns. Applying portfolio groupings, we find a positive association between accruals quality and disclosure quality, suggesting that firms with higher disclosure quality engage less in earnings management and have higher accruals quality. Asset pricing tests show that an accruals quality factor and a disclosure quality factor explain the time-series variation in the excess returns of similar sets of portfolios. This suggests that they contain similar information and confirms the substitutive nature of accruals quality and disclosure quality factors.
|Uncontrolled Keywords:||Accruals quality; Asset pricing; Disclosure quality; Information risk|
|Subjects:||H Social Sciences > HG Finance|
|Divisions:||Schools and Research Institutes > Business School > Business and Human Resource Management|
|Research Priority Areas:||Applied Business Research|
|Depositing User:||Anne Pengelly|
|Date Deposited:||12 May 2015 14:51|
|Last Modified:||26 Aug 2016 13:54|