The Accrual Anomaly

36 Pages Posted: 28 Mar 2011  

Patricia M. Dechow

University of California, Berkeley - Accounting Group

Natalya V. Khimich

Drexel University

Richard G. Sloan

University of California, Berkeley - Accounting Group

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

Dechow, Patricia M. 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

Patricia M. Dechow

University of California, Berkeley - Accounting Group ( email )

Haas School of Business
Berkeley, CA 94720
United States

Natalya V. Khimich

Drexel University ( email )

3141 Chestnut St
Philadelphia, PA 19104
United States

Richard G. Sloan (Contact Author)

University of California, Berkeley - Accounting Group ( email )

Haas School of Business
Berkeley, CA 94720
United States

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