The Accrual Anomaly
36 Pages Posted: 28 Mar 2011
Date Written: March 22, 2011
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