The Accrual Anomaly

Dechow, Patricia; Khimich, Natalya V.; Sloan, Richard G.

doi:10.2139/ssrn.1793364

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The Accrual Anomaly

36 Pages Posted: 28 Mar 2011

See all articles by Patricia Dechow

Richard G. Sloan

University of Southern California - Leventhal School of Accounting

Date Written: March 22, 2011

Abstract

This paper provides a practitioner-oriented review of the accrual anomaly in Sloan (1996) and related subsequent research. We begin with two simple examples that illustrate the computation and interpretation of accruals. We next review Sloan's (1996) original paper and related subsequent research corroborating Sloan's interpretation of the accrual anomaly. We next summarize research providing alternative explanations for the accrual anomaly. We finish with a brief discussion of the practical implications of this research.

Keywords: Accrual, Anomaly, Earnings, Stock Prices

JEL Classification: G12, G14, M41

Suggested Citation: Suggested Citation

Dechow, Patricia and Khimich, Natalya V. and Sloan, Richard G., The Accrual Anomaly (March 22, 2011). Available at SSRN: https://ssrn.com/abstract=1793364 or http://dx.doi.org/10.2139/ssrn.1793364