|
Accrual Management and Institutional Trading
Steven Balsam, Temple University
Wen He, University of New South Wales
Srinivasan Sankaraguruswamy, National University Of Singapore
ABSTRACT. Earnings management has long been a hot issue in both academic research and regulatory debates. In this study, I provide empirical evidence that institutional investors understand and trade on accrual information. Specifically, in a sample of ex post evidence of accrual management, I find a significantly negative association between discretionary accruals and quarterly changes in institutional ownership, and this negative association exists even after the Regulation Fair Disclosure (Reg FD) became effective in October 2000. I also show that institutional trading on accruals mitigates accrual anomaly.
Full-Text is no longer available online. Please contact the author(s) for more information about this manuscript.
Back to Session Listing
|