دانلود رایگان مقاله تغییر مقیاس کیفیت سود در طول زمان

Abstract

The properties of earnings have changed dramatically over the past 40 years. Prior studies interpret this trend as a decline in earnings quality but disagree on whether it results from changes in the real economy or changes in accounting standards. I find that each new cohort of listed firms exhibits lower earnings quality than its predecessors, mainly because of higher intangible intensity. I conclude that the trend of decline in earnings quality is due more to changes in the sample of firms than to changes in generally accepted accounting principles (GAAP) or in the earnings quality of previously listed firms.

5. Concluding remarks

This study shows that successive cohorts of newly listed firms since 1970 exhibit progressively lower EQ measures. One of the principal reasons for this development is the successive cohorts' increasing intangible intensity, which affects the firms' business performance and their financial reports. Specifically, successive cohorts display increasing volatility of both revenues and cash flows, arguably because of high uncertainty about the benefits of intangible investments. Further, successive cohorts display decreasing matching and increasing expense volatility, mainly because of the immediate expensing of intangible investments. The increases in revenue and expense volatilities, in conjunction with the decline in