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  • AAM_Choi_et_al._2019

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Managerial Ability and Income Smoothing

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Managerial Ability and Income Smoothing. / Baik, Bok ; Choi, Sunhwa; Farber, David B.
In: The Accounting Review, Vol. 95, No. 4, 01.07.2020, p. 1-22.

Research output: Contribution to Journal/MagazineJournal articlepeer-review

Harvard

Baik, B, Choi, S & Farber, DB 2020, 'Managerial Ability and Income Smoothing', The Accounting Review, vol. 95, no. 4, pp. 1-22. https://doi.org/10.2308/accr-52600

APA

Baik, B., Choi, S., & Farber, D. B. (2020). Managerial Ability and Income Smoothing. The Accounting Review, 95(4), 1-22. https://doi.org/10.2308/accr-52600

Vancouver

Baik B, Choi S, Farber DB. Managerial Ability and Income Smoothing. The Accounting Review. 2020 Jul 1;95(4):1-22. Epub 2019 Oct 11. doi: 10.2308/accr-52600

Author

Baik, Bok ; Choi, Sunhwa ; Farber, David B. / Managerial Ability and Income Smoothing. In: The Accounting Review. 2020 ; Vol. 95, No. 4. pp. 1-22.

Bibtex

@article{a670fa3bd25d4b44ab57c973d701057c,
title = "Managerial Ability and Income Smoothing",
abstract = "n this study, we investigate whether managerial ability is related to income smoothing and, if so, whether smoothing associated with managerial ability improves the informativeness of earnings and stock prices about future performance. Using a large sample of firms, we find that managerial ability is positively related to smoothing. More importantly, we show that high-ability managers incorporate more forward-looking information about cash flows into current earnings through smoothing, thereby enhancing earnings informativeness. We also find that smoothing associated with high-ability managers improves stock price informativeness about future cash flows. Our study should be of interest to researchers, practitioners, and others concerned with understanding the determinants and usefulness of smoothing",
author = "Bok Baik and Sunhwa Choi and Farber, {David B.}",
year = "2020",
month = jul,
day = "1",
doi = "10.2308/accr-52600",
language = "English",
volume = "95",
pages = "1--22",
journal = "The Accounting Review",
issn = "0001-4826",
publisher = "American Accounting Association",
number = "4",

}

RIS

TY - JOUR

T1 - Managerial Ability and Income Smoothing

AU - Baik, Bok

AU - Choi, Sunhwa

AU - Farber, David B.

PY - 2020/7/1

Y1 - 2020/7/1

N2 - n this study, we investigate whether managerial ability is related to income smoothing and, if so, whether smoothing associated with managerial ability improves the informativeness of earnings and stock prices about future performance. Using a large sample of firms, we find that managerial ability is positively related to smoothing. More importantly, we show that high-ability managers incorporate more forward-looking information about cash flows into current earnings through smoothing, thereby enhancing earnings informativeness. We also find that smoothing associated with high-ability managers improves stock price informativeness about future cash flows. Our study should be of interest to researchers, practitioners, and others concerned with understanding the determinants and usefulness of smoothing

AB - n this study, we investigate whether managerial ability is related to income smoothing and, if so, whether smoothing associated with managerial ability improves the informativeness of earnings and stock prices about future performance. Using a large sample of firms, we find that managerial ability is positively related to smoothing. More importantly, we show that high-ability managers incorporate more forward-looking information about cash flows into current earnings through smoothing, thereby enhancing earnings informativeness. We also find that smoothing associated with high-ability managers improves stock price informativeness about future cash flows. Our study should be of interest to researchers, practitioners, and others concerned with understanding the determinants and usefulness of smoothing

U2 - 10.2308/accr-52600

DO - 10.2308/accr-52600

M3 - Journal article

VL - 95

SP - 1

EP - 22

JO - The Accounting Review

JF - The Accounting Review

SN - 0001-4826

IS - 4

ER -