Replication of Moses' income smoothing tests with Canadian and UK data: a note
Article Abstract:
A repeat of Moses' income smoothing tests through an examination of the use of accounting changes as income smoothing devices by managers of Canadian and UK firms shows remarkably different results. In particular, there is a lack of relationship between the smoothing variable and firm size, which has been theorized as a proxy for political sensitivity in the US. However, firm size can proxy for different phenomena in the US and the other countries tested. Further research is needed before it can be concluded that financial reporting in the US, Canada and the UK are similar.
Publication Name: Journal of Business Finance and Accounting
Subject: Business
ISSN: 0306-686X
Year: 1996
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Estimation of internal rate of return under nonsteady conditions
Article Abstract:
A technique for computing the internal rate of return (IRR) using published financial reports under nonsteady conditions was developed. The IRR was permitted to systematically change as time progresses. The procedure allows the calculation of the current profitability of periodic total expenditure, its rate of change and the firm-level profitability. The restricted nonsteady model was found to produce the most reliable estimates among four kinds of models.
Publication Name: Journal of Business Finance and Accounting
Subject: Business
ISSN: 0306-686X
Year: 1997
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A market based analysis of income smoothing
Article Abstract:
A sample of 358 companies taken from an initial sample of the Standard and Poor's 500 is examined to determine the relationship between income smoothing and the reaction in the marketplace. Companies that smooth income were found to have a significantly lower mean annualized return compared to those companies that do not smooth income. Smoothing companies were also found to have lower betas and higher market value of equity.
Publication Name: Journal of Business Finance and Accounting
Subject: Business
ISSN: 0306-686X
Year: 1995
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