Izadi_Zadeh_Darjezi,_Javad.pdf (3.93 MB)
Interim accounting earnings and price momentum
thesis
posted on 2023-06-08, 14:07 authored by Javad Izadi Zadeh DarjeziWe know that managers may use their discretion by structuring transactions that can alter financial reports in order to persuade stockholders in their interpretation of the underlying economic performance of the company. The study reported in this thesis examines such earnings discretion in the six monthly interim reports issued by listed firms in the UK, and investigates the relationship between estimates of earnings manipulation and the market pricing of the firm’s shares. This is tested by examining whether managers use their discretion to sustain earnings trends in the case of ‘winner’ firms, i.e. those that are in the upper range of prior returns, and likewise to keep a negative trend in ‘loser’ firms, those in the lower range of prior returns. Specifically, momentum portfolios are formed based on past six-month returns and tested for differences in future six-month earnings management, as measured by discretionary current accruals in six month interim reporting periods. The results suggest that discretionary current accruals are significantly associated with past returns for winner more than loser firms, and hence that past returns may contribute to the explanation of future earnings management, the behaviour being consistent with appearing either to persist as winners or to turn losers around
History
File Version
- Published version
Pages
248.0Department affiliated with
- Economics Theses
Qualification level
- doctoral
Qualification name
- phd
Language
- eng
Institution
University of SussexFull text available
- Yes
Legacy Posted Date
2013-01-09Usage metrics
Categories
No categories selectedLicence
Exports
RefWorks
BibTeX
Ref. manager
Endnote
DataCite
NLM
DC