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Advisor(s)
Abstract(s)
We investigate whether firms’ economic and financial situation influence
the Quality of their Financial Reports (FRQ). FRQ is fundamental for investors
and it affects the international capital movements [Bradshaw et al. (2004)] and
Gelos and Wei (2005)]. Following Schipper and Vicent (2003) we use two
issues to access earnings quality: abnormal accruals and earnings persistence.
For seventeen European countries, we find evidence that the economic
performance affects FRQ. Big firms and those with high current earnings exhibit
better financial information. These results are robust since they don’t depend on
FRQ proxy and we have the same evidence when we estimate regression with
economical and financial factors separately or together. About financial
situation, it seems not to affect FRQ. However, in high leveraged firms, the
capital structure becomes determinant.
Description
Keywords
Firm performance Capital structure Financial report quality Abnormal accruals