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AuthorAldamen, Husam
AuthorDuncan, Keith
Available date2015-11-05T10:30:45Z
Publication Date2013
Publication NameAccounting & Finance
ResourceWiley Online library
CitationAldamen, H. and Duncan, K. (2013), Pricing of innate and discretionary accruals in Australian debt. Accounting & Finance, 53: 31–53.
ISSN1467-629X
URIhttp://dx.doi.org/10.1111/j.1467-629X.2011.00458.x
URIhttp://hdl.handle.net/10576/3716
AbstractThis paper addresses the conflicting evidence on the role of accruals in debt pricing. We show that the two subcomponents of accruals quality, innate and discretionary accruals, both impact the debt pricing. Higher innate accruals increases cost of debt, consistent with the prior evidence (Francis et al., 2005; Gray et al., 2009). However, we also find that higher discretionary accruals reduce the cost of debt. This contrasts with the prior evidence of a positive association between discretionary accruals and cost and debt (Francis et al., 2005), and no association (Gray et al., 2009). We show that noisy measurement of cost of debt reconciles these results.
Languageen
PublisherBlackwell Publishing Ltd
SubjectInformation risk
Innate accruals
Discretionary accruals and debt pricing
M40
M41
TitlePricing of innate and discretionary accruals in Australian debt
TypeArticle
Issue Number1
Volume Number53


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