The Pricing of Discretionary Accruals - Evidence from Pakistan
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, accounta...
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doaj-8d8d9486c55d451688edb3c5b0ce58932020-11-25T00:36:58ZengUniversity of Management and TechnologyJournal of Management and Research2218-27052519-79242015-12-01221528The Pricing of Discretionary Accruals - Evidence from PakistanZunera Khalid0Farah Yasser1Muhammad Mobeen Ajmal2MS Finance Scholar, School of Business and Economics, University of Management and Technology, Lahore, Pakistan Email: zunerakhalid4@gmail.comAssistant Professor, School of Commerce and Accountancy, University of Management and Technology, Lahore, Pakistan Email: farah.yasser@umt.edu.pkLecturer, Department of Finance, School of Business and Economics, University of Management and Technology, Lahore, Pakistan Email: mobeen.ajmal@umt.edu.pkEven 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.http://admin.umt.edu.pk/Media/Site/SBE1/SubSites/JMR/FileManager/JMR/paper_2.pdfPricingDiscretionary AccrualsEarnings ManagementAudit quality. |
collection |
DOAJ |
language |
English |
format |
Article |
sources |
DOAJ |
author |
Zunera Khalid Farah Yasser Muhammad Mobeen Ajmal |
spellingShingle |
Zunera Khalid Farah Yasser Muhammad Mobeen Ajmal The Pricing of Discretionary Accruals - Evidence from Pakistan Journal of Management and Research Pricing Discretionary Accruals Earnings Management Audit quality. |
author_facet |
Zunera Khalid Farah Yasser Muhammad Mobeen Ajmal |
author_sort |
Zunera Khalid |
title |
The Pricing of Discretionary Accruals - Evidence from Pakistan |
title_short |
The Pricing of Discretionary Accruals - Evidence from Pakistan |
title_full |
The Pricing of Discretionary Accruals - Evidence from Pakistan |
title_fullStr |
The Pricing of Discretionary Accruals - Evidence from Pakistan |
title_full_unstemmed |
The Pricing of Discretionary Accruals - Evidence from Pakistan |
title_sort |
pricing of discretionary accruals - evidence from pakistan |
publisher |
University of Management and Technology |
series |
Journal of Management and Research |
issn |
2218-2705 2519-7924 |
publishDate |
2015-12-01 |
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. |
topic |
Pricing Discretionary Accruals Earnings Management Audit quality. |
url |
http://admin.umt.edu.pk/Media/Site/SBE1/SubSites/JMR/FileManager/JMR/paper_2.pdf |
work_keys_str_mv |
AT zunerakhalid thepricingofdiscretionaryaccrualsevidencefrompakistan AT farahyasser thepricingofdiscretionaryaccrualsevidencefrompakistan AT muhammadmobeenajmal thepricingofdiscretionaryaccrualsevidencefrompakistan AT zunerakhalid pricingofdiscretionaryaccrualsevidencefrompakistan AT farahyasser pricingofdiscretionaryaccrualsevidencefrompakistan AT muhammadmobeenajmal pricingofdiscretionaryaccrualsevidencefrompakistan |
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