Title | The association between accruals and stock return following IFRS3 |
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Type | Journal article |
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Authors | Izadi, J., Nazarian, A., Ye, J. and Shahzad, A. |
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Abstract | The purpose of this study is to investigate the correlation between accruals and stock return and further the quality of accounting accruals shown in financial statements for shareholders to predict their future returns. This study uses an inimitable location which is provided by FRS3 in the UK to highlight the well-documented accrual anomaly as important components of financial performance to help the users to understand the archived performance of a firm. Specifically, this paper focuses on the accrual anomaly phenomenon in the UK on the adoption of FRS No. 3 for a period from 2008 to 2017. Our result shows that stock returns can be predicted by accruals attributable to accounting misrepresentations. Generally, our findings support the information disclosure due to FRS No. 3. Also, the results are consistent with increased accounting disclosure to help investors protect themselves from inefficiencies and to encourage them to be aware of accurate stock prices in the market. |
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Keywords | accruals |
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| stock returns |
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| FRS No 3 |
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Journal | International Journal of Accounting, Auditing and Performance Evaluation |
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Journal citation | 15 (3), pp. 262-277 |
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ISSN | 1740-8008 |
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Year | 2019 |
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Publisher | InderScience |
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Accepted author manuscript | File Access Level Open (open metadata and files) |
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Digital Object Identifier (DOI) | https://doi.org/10.1504/IJAAPE.2019.102249 |
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Web address (URL) | https://www.inderscienceonline.com/doi/abs/10.1504/IJAAPE.2019.102249 |
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Publication dates |
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Published | 12 Sep 2019 |
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