Publication Type
Working Paper
Version
publishedVersion
Publication Date
7-2008
Abstract
We study whether more asymmetrically timely earnings constrain payouts to shareholders in the presence of bad news. Our goal is to provide evidence on the ex post contracting benefits of accounting conservatism. We distinguish between cash flow asymmetric timeliness and accrual asymmetric timeliness to examine how each relates to asymmetric sensitivity of shareholder payouts. We find that only the asymmetric timeliness of cash flows is significantly related to the asymmetric sensitivity of shareholder payouts. Other measures of conservatism (earnings skewness and accumulated nonoperating accruals) are also not significantly related to the sensitivity of shareholder payouts given bad news. These results suggest that accounting policies do not significantly constrain shareholder distributions conditional on news that does not affect cash flows.
Keywords
Asymmetric timeliness, shareholder distributions
Discipline
Finance | Finance and Financial Management
Research Areas
Finance
First Page
1
Last Page
49
Identifier
10.2139/ssrn.1157547
Publisher
SSRN
Citation
FRANKEL, Richard M.; SUN, Yan; and WANG, Rong.
Earnings asymmetric timeliness and shareholder distributions. (2008). 1-49.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/5336
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.2139/ssrn.1157547