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The Pricing of Discretionary Accruals - Evidence From Pakistan

The Journal of Management and Research

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Title The Pricing of Discretionary Accruals - Evidence From Pakistan
Creator Khalid, Zunera
Yasser, Farah
Ajmal, Muhammad Mobeen
Description Even now with the cutting edge businesses and specialized management, a large number of the firms are owned by families in Pakistan. Agency disagreements and issues exist between the management and the owners as well as the minority shareholders and the block holders. To handle these feuds, accountants use discretionary accruals. These accruals help to manage earnings and smooth sharp trends to protect the interest of management and the owners. This study determines whether the investors manage the earnings through discretionary accruals or do they price these accruals when considering the stock price. This study finds significant evidence that the market prices discretionary accruals. We find that the firms with higher number of institutional ownership, high quality audit production and higher number of independent board have significantly higher impact of discretionary accruals on their stock returns as compared to other firms.
Publisher University of Management and Technology
Date 2019-11-29
Type info:eu-repo/semantics/article
Format application/pdf
Source Journal of Management and Research; Vol 2 No 2 (2015): Volume 2, Issue 2, 2015
Language eng
Rights Copyright (c) 2019 Editorial Assistant; Zunera Khalid, Farah Yasser, Muhammad Mobeen Ajmal