Is the Accrual Anomaly a Global Anomaly?

59 Pages Posted: 18 Aug 2005

Date Written: August 11, 2005


This paper investigates the subsequent return implications of accruals within a sample of large, developed, international equity markets and assesses whether similar institutional features account for the accrual anomaly across countries. I investigate the returns implications of accruals in 17 countries over the 1989 to 2003 time period. In general, the results of country-specific analysis indicate that the accrual anomaly is a global phenomenon. After decomposing total accruals, I find, in general, that accrual mispricing is largest for working capital accruals, specifically current asset accruals. However, the results of further analysis suggest that there is no dominant factor that explains the accrual anomaly internationally. Overall, the results indicate that the accrual anomaly is present in international markets yet the factor(s) driving the accrual anomaly appear to vary across markets.

JEL Classification: M41, G14, M43, M47

Suggested Citation

LaFond, Ryan, Is the Accrual Anomaly a Global Anomaly? (August 11, 2005). MIT Sloan Research Paper No. 4555-05, Available at SSRN: or

Ryan LaFond (Contact Author)

Algert Global, LLC ( email )

One Maritime Plaza
Suite 1525
San Francisco, CA 94111
United States

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