City Research Online

Abstract

The present study examines the role of disclosure in assisting market participants to form expectations of future earnings from the accrual content of reported earnings. Using the Transparency and Disclosure ratings prepared by Standard and Poor’s, we show how disclosure and accruals jointly affect the earnings expectations that are incorporated in current stock returns, depending not only on the magnitude, but also on their duration, i.e.whether they affect current or non-current operations,and their sign, i.e. whether they increase net operating assets(a positive net accrual) or decrease net operating assets(a negative net accrual).

Publication Type:	Article
Additional Information:	This is the pre-peer reviewed version of the following article: Dargenidou, C., McLeay, S. and Raonic, I. (2011), Accruals, Disclosure and the Pricing of Future Earnings in the European Market. Journal of Business Finance & Accounting, 38: 473–504, which has been published in final form at http://dx.doi.org/10.1111/j.1468-5957.2011.02245.x . This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving
Publisher Keywords:	Corporate disclosure; accruals; earnings expectations; share price anticipation of future earnings; Standard and Poor’s transparency and disclosure.
Subjects:	H Social Sciences > HG Finance
Departments:	Bayes Business School > Finance
SWORD Depositor:	Symplectic Administrator

Export

Downloads