| Summary: | 碩士 === 大同大學 === 事業經營學系(所) === 96 === Earnings management has been the subject that everyone concerns. Security analysts, firm managers, and investors all pay a great deal of attention to the relation between firms’ reported earnings and stock prices. Following Chan, Chan, Jegadeesh and Lakonishok (2006), we measure the components of discretionary accruals to carry out our empirical study. Changes in accounts receivable, inventory and accounts payable are the components of accruals. This study investigates the relation between components of accruals and future stock returns.
The empirical results are summarized as follows:
1. Accruals have the influence on the relation between earnings change and the stock returns.
2. Inventory, accounts receivable and accounts payable are negatively related to future stock returns.
3. The discretionary components of accruals (accounts receivable, inventory and accounts payable) have predictive power for future stock returns.
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