TY - UNPB
T1 - Are accruals actually less persistent than cash flows?
AU - De Moura, André Aroldo Freitas
AU - Motoki, Fabio Yoshio Suguri
AU - Modolo, Rafaela
AU - Gerakos, Joseph
PY - 2023/4/6
Y1 - 2023/4/6
N2 - Prior literature finds that cash flows are more persistent than accruals. We show that this finding arises from empirical specifications that do not completely incorporate non-current accruals and do not account for accrual estimation errors. We develop a specification that addresses these two issues and then show that accruals are more persistent than cash flows. In addition, we develop and apply an approach to validate accrual specifications.
AB - Prior literature finds that cash flows are more persistent than accruals. We show that this finding arises from empirical specifications that do not completely incorporate non-current accruals and do not account for accrual estimation errors. We develop a specification that addresses these two issues and then show that accruals are more persistent than cash flows. In addition, we develop and apply an approach to validate accrual specifications.
U2 - 10.2139/ssrn.4398902
DO - 10.2139/ssrn.4398902
M3 - Preprint
BT - Are accruals actually less persistent than cash flows?
PB - SSRN
ER -