Title page for ETD etd-06212012-212936


Type of Document Dissertation
Author Fang, Jing
URN etd-06212012-212936
Title Stock Liquidity, Price Informativeness, and Accruals-Based Earnings Management
Degree Doctor of Philosophy (Ph.D.)
Department Accounting
Advisory Committee
Advisor Name Title
Cheng, C.S. Agnes Committee Chair
Hollie, Dana Committee Member
Legoria, Joseph Committee Member
Lin, Ji-Chai Committee Member
Keywords
  • accruals
  • earnings management
  • price informativeness
  • stock liquidity
Date of Defense 2012-04-26
Availability unrestricted
Abstract
We examine the effect of stock liquidity on accruals-based earnings management. Finance literature suggests that stock liquidity leads to price efficiency. If prices are efficient, more future earnings should be reflected in current prices. Therefore, gain from shifting accruals across periods should be low and managers should have less incentive to manage earnings. We find that higher stock liquidity is associated with higher future earnings response coefficient and lower accruals-based earnings management. Our finding has important implication for the decline in accruals-based earnings management during 2001-2005 documented in prior study. Our additional trend analysis suggests that instead of SOX and other concurrent events, price efficiency improvement resulting from microstructure regime shifting (e.g., reduction in tick size from $1/16 to $1/100) may drive the decline in accruals-based earnings management during the period of 2001-2005.
Files
  Filename       Size       Approximate Download Time (Hours:Minutes:Seconds) 
 
 28.8 Modem   56K Modem   ISDN (64 Kb)   ISDN (128 Kb)   Higher-speed Access 
  StockLiquidityPriceInformativenessAndAccrualsBasedEarningsManagement.pdf 1.23 Mb 00:05:41 00:02:55 00:02:33 00:01:16 00:00:06

Browse All Available ETDs by ( Author | Department )

If you have questions or technical problems, please Contact LSU-ETD Support.