Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

The role of current and non‐current accruals in the relation between stock returns and earnings

The role of current and non‐current accruals in the relation between stock returns and earnings This study examines the role of accruals in the relation between stock returns and earnings for intervals of one to four years. We argue that the roles of current and non‐current accruals differ because the former turn over more frequently while the latter include long term timing differences and permanent differences. Accordingly, the roles of both categories of accruals are examined over intervals within and beyond the cycle of current accruals. The results suggest that accruals strengthen the association between stock returns and earnings and that they are more important for shorter intervals. Further, non‐current accruals play a dominant role in the relation between stock returns and earnings while the effect of current accruals is negligible for all intervals examined. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Accounting & Finance Wiley

The role of current and non‐current accruals in the relation between stock returns and earnings

Accounting & Finance , Volume 37 (2) – Nov 1, 1997

Loading next page...
 
/lp/wiley/the-role-of-current-and-non-current-accruals-in-the-relation-between-vZXEEkRnvR

References (13)

Publisher
Wiley
Copyright
© 1997 Accounting and Finance Association of Australia and New Zealand
ISSN
0810-5391
eISSN
1467-629X
DOI
10.1111/j.1467-629X.1997.tb00318.x
Publisher site
See Article on Publisher Site

Abstract

This study examines the role of accruals in the relation between stock returns and earnings for intervals of one to four years. We argue that the roles of current and non‐current accruals differ because the former turn over more frequently while the latter include long term timing differences and permanent differences. Accordingly, the roles of both categories of accruals are examined over intervals within and beyond the cycle of current accruals. The results suggest that accruals strengthen the association between stock returns and earnings and that they are more important for shorter intervals. Further, non‐current accruals play a dominant role in the relation between stock returns and earnings while the effect of current accruals is negligible for all intervals examined.

Journal

Accounting & FinanceWiley

Published: Nov 1, 1997

There are no references for this article.