Document Type
Article
Keywords
accounting; business; management; management theory
Identifier Data
http://nabet.us/j_archives/JBET_2019.pdf#page=7
Publisher
National Association of Business, Economics and Technology
Publication Source
Journal of Business, Economics and Technology
Abstract
This paper evaluates how persistent earnings and its accrual and cash flow components are conditional on the modified Jones Model discretionary accruals and the accrual ratio. Consistent with prior research cash flows are more persistent than both earnings and the accruals component of earnings. While the difference in persistence of the extreme deciles of Discretionary Accruals are not very large, those of the Accrual Ratio are much larger, suggesting that the Accrual Ratio can be a simple but effective gauge of earnings persistence and can complement Discretionary Accruals as a measure of the persistence dimension of earnings quality.
